XAU/USD Gold has potential..but could go wrongThis is a long analysis I made both for myself and to share it with you,
I have to say that, I don't usually trade Gold.
And I won't be able to comment on the current state of world and news.
So this analysis will be focusing only on the charts,
please consider the market data and news before taking any position.
I summarized everything at the end of the post...
Looking at the really long term picture of Gold, we can see that Gold tried to break higher several times before.
This time however, as shown, it has a sweet bounce above the trend. It managed to show much more bullish behaviour than before.
In my view, this can go both ways;
it can reach new highs which I expect and the first profit target would be 2400$
or second possibility It gets rejected really quick and falls down to levels such as 1850$
Market news and short-term movements will decide..
We can see that the price got rejected as it should at around 2200$
I will investigate Gold in separate parts, each time narrowing the timeframe.
on this frame, which is again a wide look to see the long term potential.
I see a strong bullish behavior rising within the pink trend.
this should be able to break through the 2200$ mentioned on the previous chart snapshot.
Unless a downtrend, that is much larger than the blue one, I expect the Gold to move within the trend, potentially reaching the 2400$ target.
Since we confirmed the long term behavior, now lets examine the short term behaviour,
because a drop to 1850$ would still make the long term viable but significantly extend the trade duration making it unfavorable
This time I will be looking within the pink trend in detail...
we are down to the last 3 years,
we can identify the bullish turn from this frame too.
the blue downtrend within the previously mentioned pink uptrend is broken.
If the price keeps rising above 2200$,
The more steep purple trend should be able to push the price a bit beyond the white trend to the 2250$ point.
After that, I expect the price to move with the strong bullish behaviour...
around 2250$ the price will stick above the upperband of the white trend and after some short consolidation, potentially create a much steeper version of the white trend making the old one insignificant and rise rapidly to 2400$.
Or If the price can't go pass 2200$ and starts falling,
Will probably retest the 2080$ and maybe even fall further...
a more detailed analysis will be necessary in that case, since the trade length will significantly increase..
Now I will be looking if the price will pass 2200$ and how am I going to keep track of it.
We are down to a month long frame,
the pink and purple lines are the trends more focused and carried from the previous frame to fit the short term approach, I use them as guides..
At 2200$ the really steep uptrend ended,
bearish movement started shown with the yellow trend,
If the down trend is broken and again another bullish move starts.
I expect another trend to be formed, in place of the older steep white trend,
marked with bold white stripes.
the price should be staying close to 2180$-2190$ marks and we will see if it can get past 2200$
If it does, the price should continue rising as I mentioned on the previous frame.
If bearish movement continues and yellow trend can't be broken yet,
price should fall back to around 2145$-2150$.
And further failure to break above will result in prices such as 2080$
but I will be investigating the short term again if that happens.
In summary,
Long term approach Bullish no matter what.
Price Target 2400$ for now...
but for a more detailed entry idea
the timing of the trade however will change depending on two conditions;
1- If it can break above 2200$ I expect to reach price target in 2-3 months.
2- If it falls below 2150$ the trade will be postponed until a more solid level is reached possibly around 2080$
In either case, market news will play a big part on this...
And I would appreciate any different ideas on the comments
I will be updating this from time to time.
