GOLD Megaphone Formation in the H4 Timeframe

GOLD Technical Analysis

• Selling the rallies
• Megaphone pattern
• Retracement could happen
• Watch camarilla as potential targets

MEGATREND MAs: Bullish

H4 GOLD

1. Trend line start
2. Higher High
3. Highest high
4. Low
5. Lower low
6. The end of megaphone

As we could see from the technical point of view, GOLD is having an uptrend while still being sold on rallies.This analysis is a part of the Megatrend trading course. I have been selling the rallies all the way.1880 is the next point where we could start selling providing that the prices retraces to that level.

With the latest CPI inflation reading among other things, real wages are falling and consumer sentiment is taking a big hit. We have the backdrop which is stagflationary. If the market manages to stay above the left shoulder it should bounce up. We should also keep an eye on the AUD. The AUD has a high correlation to gold due to Australia’s extensive gold mining operations.

As gold prices fluctuate, this increases or decreases the amount of funds transferred into AUD to make purchases of the metal. These transfers essentially change demand for the currency and can directly cause changes in the AUDUSD currency pair as well. Those seeking to evaluate exposures in AUD and BRL currencies might also look to the price of iron ore as a potential driver of returns.

Gold is widely regarded as a currency in its own right and thus, during times of US dollar weakness, gold often increases in value as many investors choose to own gold rather than US dollars.

However at this point we can use technicals to sell GOLD. 1880-90 is the next dynamic zone where I would sell. My shorts are still going well as you can see on the chart. Targets are 1857 and 1843 followed by 1820 but only if momentum keeps strong. I am scaling out close to each target while keeping the stop at the BE. Targets for the current move are 1850 followed by 1843 and 1819. Selling zone is the 1880-90

Cheers and safe trading,

Nenad