After yesterday’s CPI report, Gold went berserk. Taking out buyers by hunting the stop losses and attaining liquidity to move up. Market had been range bound previously with no clear direction.

Market structure: From a technical standpoint, Daily and H4 are ideal time frames for Gold. The structure on Daily had been choppy lately. Market tapped resistance at $1810 and kept ranging there since last 6 days. Candles kept breaking the previous candles high. Buying on a resistance is really risky, hence we wait for a breakout and retest to go long. Until this resistance is breached, we are still in a range or an accumulation phase for a mark-up.

Retracements: No daily retracements can be detected at any support levels on the daily. We cannot force our drawings. Not having a retracement levels aligned with our support, we pertain to only 1 confirmation so far.

Trendline: Earlier, the ascending trendline broke the market and took the effect for the bearish move. 50% of the trend line, after breakout, had been covered on the sell side. Currently, no trendline is formed for a bullish setup.

EMA: Both EMA’s had been above the current prices. Right now, EMA’s are in a tough spot due to both completely over-lapping each other and giving a neutral bias. Until it’s broken upwards and retests the EMA 50, going long is on hold. The retest has a probability to be at the resistance turn support level.

Bollinger band: The upper band can be tested and has around 100 pip range. Middle range has broken and retested as well earlier. Other factors being neutral, BB is one indicator giving us a bullish sign.

RSI/CCI: RSI sits at 54 and CCI at 130. Both the oscillators represent a bull bias. Also, both the oscillators have breached the descending trendline, inferring to the breakout buy. We do have a room to go bullish till the overbought lengths. RSI/CCI are the second confirmations for the long setup.

With Gold, having 2 confirmations can be risky. We look minimal for 3 confirmations. Right now, the bias is neutral as market stands still at the resistance of Daily. Until the resistance is broken out, or rejected, we cannot infer a trading plan as of now.

Neutrality on Gold

Jul 14 2021