After the NFP on previous Friday, Gold took a massive dump of around $40. Then on Monday morning, in the Asian session, there was a gold flash crash which dumped gold to a mere $80, nearly crashing it within an hour and then recovering back to the normal range. Right now, gold needs a correction upwards after a massive down turn. We will analyze Gold on H4 for a swing perspective.

- Market structure: The market structure on GOLD is still bearish but it did manage to create a minor support on h1 at 1727 level. It should be noted, this level gold is in is also a daily and weekly level of support. The wick was below passed this support level but it managed to close back in this current support. We anticipate a correction on the Gold from this support onwards towards the resistance at 1748.

- Trendline: There is no current trendline or pattern structure on Gold. After the dump, gold is going to take few days to form its structure based for trendline.

- Retracement: The golden retracement area of 75-78.6% aligns perfectly with the support level of daily and weekly. This makes it even a stronger region for longs.

- EMA's: Both EMA’s are bearish as death cross has occurred earlier. What we foresee is a correction towards the EMA 50 and then EMA 200 as a retest. These retests will be our potential profit targets. The EMA 50 retest might happen at the resistance level.

- RSI/CCI: Both RSI and CCI went to the extended over-sold region. At this level, there is only oscillator divergence with one point being at the over-sold region and the second being above the region. Trendlines are draw to reflect the divergence.

After a flash crash, currencies or commodities usually take a toll and bring prices back to the normal range. At this point, we will be looking to go long on gold till 1748 as we forecast a correction of the flash crash move. If gold slips below 1720, we are out of the market taking a hit.

Gold after flash crash

Aug 10 2021

Stop Loss -0.59%

Holding time 1hr

1728.36

Entry price

1718.21

Stop loss price

1