XAU/USD: LOSING STEAM? POTENTIAL FOR SELLOFF PRESENT AGAIN
As we approach the end of the week with gold making big moves throughout, It's starting to become apparent that gold bulls are a little bit cautious now, especially with the overbought conditions on my favorite chart for indicator confluence, the 4H. 4H chart is maxed out on RSI for the last few days now but as we can see in price action today, the massive spike coupled with the sharp drop right after. Lower highs apparent for the previous trading block marked by blue vertical lines on my chart.
I am not entirely sold on the sell position, im holding off on taking any trades until i can see a bit more confluence for the bears to takeover. At this exact moment, I have these confluences to chase a short:
- 3 lower highs shown on 30M chart (marked in blue highlighter)
- crossover of Price chart and MA on 15M chart
- 4H RSI oversold for the last few days
- price closed below critical resistance turned support (marked in solid red line)
Reasons I will not enter a trade yet:
- Bulls still have power as the trend is still generally bullish
- Most recent 30M close has long wick on bottom indicating bullish power still present
- News event tomorrow morning (Personal Income MOM, Personal spending MOM, Core PCE MOM)
- too many local support levels for me to feel comfortable holding short positions at the moment.
I will be holding off on the gold trades for now in favor of trading G/J if i see a nice move for London session. I dont want to enter a trade i am not confident in and the abundance of local supports is concerning, allowing me to believe we could potentially touch 2700, the next psychological high.
I am not entirely sold on the sell position, im holding off on taking any trades until i can see a bit more confluence for the bears to takeover. At this exact moment, I have these confluences to chase a short:
- 3 lower highs shown on 30M chart (marked in blue highlighter)
- crossover of Price chart and MA on 15M chart
- 4H RSI oversold for the last few days
- price closed below critical resistance turned support (marked in solid red line)
Reasons I will not enter a trade yet:
- Bulls still have power as the trend is still generally bullish
- Most recent 30M close has long wick on bottom indicating bullish power still present
- News event tomorrow morning (Personal Income MOM, Personal spending MOM, Core PCE MOM)
- too many local support levels for me to feel comfortable holding short positions at the moment.
I will be holding off on the gold trades for now in favor of trading G/J if i see a nice move for London session. I dont want to enter a trade i am not confident in and the abundance of local supports is concerning, allowing me to believe we could potentially touch 2700, the next psychological high.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.