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Gold Attempts to Break Out

By:
Marc Principato
Updated: Jun 25, 2020, 06:12 UTC

Gold has run to its range high resistance area and attempted to break out, only to produce a bearish pin bar.

Comex Gold

For those who bought the break out, this is not a comfortable position to be in, even though the broader price structure and fundamentals favor a bullish move. The reason? The reward/risk is NOT attractive here for a short term swing trade.

Do not let fundamentals or hype fool you or force you into some useless opinion. No matter how bullish gold “should” be, it can still very easily retrace and test of the middle of the broad consolidation that it has been gyrating within for weeks. Previous retracements have gone as low as 1670 and 1700 respectively even in this bullish gold environment. The bearish pin bar is not to be confused with a trend reversal, but it is pointing to potential bearish momentum at least for the next couple of days or going into early next week.

IF the bearish momentum follows through, it is within reason for price to test as low as the 1720s which would provide a much more attractive location for a new buying opportunity. Since we have only 1/3 of our recent XAUUSD swing trade (two targets were reached), we will let the position ride and see how it plays out. IF a new buying setup appears around the support level I just mentioned, we would be open to increasing our current position by 1/3 and look for another range break out attempt

For a look at all of today’s economic events, check out our economic calendar.

This article was written by Marc Principato CMT, Executive Director at economic calendar

About the Author

Marc Principatocontributor

Marc has over twenty years of experience in the markets starting out as a Nasdaq day trader during the height of the dot com era.

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