As an intraday, Gold seems to be tapping a major level to dive down.

- Market structure: Market structure on Gold is bullish right now. But market moves in waves. It has over extended its buys and now, a correction is due. At a key resistance level of 1834-38, we may see a correction towards the support area of 1800. Earlier, we have broken 3 HH’s. After 3 HH’s, a structure is complete and market is due a correction.

- Trendline: With trendlines, we are forming an ascending pennant pattern. The upper trendline has tapped the market three times. Whereas, lower one has tested it two times. So the lesser time the trendline is tested, its more prone to being pierced.

Also, at the resistance, the trendline would have its fourth touch, which would confluence it with the zone.

- Retracement: The golden area retracement of 75-78.6% stands in confluence with the resistance at the price levels of 1834-38. This area makes it a stronger level for Gold to correct its impulse move. At this retracement level, resistance and a trendline touch gives it three confirmations for short setup.

- EMA's: Both EMA’s are below the market prices, representing the bullish bias. That being said, the death cross is still pending towards the bullish side. Also, EMA 200 after being broken has not been tested yet. So a test is due to the EMA 200.

- RSI/CCI: RSI and CCI both have formed a bearish divergence for short setups. When two oscillators coincide with divergences, that is a solid confirmation for a trade plan. We will wait for divergence to be formed, extended from the current one, at the resistance area. This will give me three confirmations.

Gold trading plan for shorts has a high probability. Also, Gold involves a high risk, as the moves are parabolic. Risk should not be above 3-5% on any gold trade.

Keeping an eye on Gold corrections

Jul 15 2021