As I mentioned in my second part about shorting gold, I would look for some kind of reversal pattern on the daily chart to confirm my trade. Now the pattern has unfolded in both daily chart and 4hr chart. In the daily chart, gold made a spinning top candlestick yesterday which indicates some kind of trend reversal. However I have found a pattern on the 4hr chart that could actually indicate a top reversal pattern - a double top.
The basic of technical analysis is that history tends to repeat itself. And as a technician, your job is try to find patterns that tend to repeat or actually happen before. What do you see from the chart:
- Double top @1300. Gold once broke down the neckline, it was a short term top until gold reaches 1200. - Possible double top @1287. Neckline @1277. - Overbought RSI at 1300-1303 and Overbought RSI at 1287-1290. - Divergent RSI at 1300-1303. and Divergent RSI at 1287-1290.
If history repeats itself, this will be hell of a break out to the downside. So let's hope it does. Trade plan: - If you have short position @1285-1290, please keep your short position with stop loss above 1303. - If you do not have a short position, you may want to take a trade once price breaks out of the neckline to the downside. Stop loss above 1290.
FED may not raise rates, it still does not matter. What matters is how they will approach the rate hike in the next meeting in July. If they are hawkish about hiking rate in July, USD will be stronger and Gold will break down. Thanks for reading and please stay tuned.
Đóng lệnh: dừng lỗ
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Closed my short position. Price made a higher high so all assumption are invalid. I have not seen any price rejection. We have to respect this market. Gold will try more upside till Brexit vote. I will look for another short entry when gold reaches 1330-1340 area.