Evening traders,
I have a chart of Gold for today. Gold has been in a downtrend ever since testing 1800 last October. I draw a downtrend channel to illustrate the move. The 50-day MA – which I use for mid-term outlook – accted as a strong resistance guide throughout the last few months. Right now, Gold is exactly there; the last two trading sessions saw Gold closing just beneath the MA. I see a straightforward case for shorting Gold at this area. Resistance coming from the 50-day MA, a support-turned-resistance line, and a downward parallel channel are reasons for my bearish posture.
However, I do see something forming on Gold’s chart that may end up being a catalyst for the upside. In the chart below I have two green boxes showing a potential double bottom pattern. Gold may two dips at 1650 and the support-turned-resistance line I drew (red) are the parameters for this potential double bottom. This means I will have to play around with entry orders and not short Gold too quickly.
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