Gold continued to range majorly throughout the week. The H4 timeframe had range bound trade setups which were buys from support and shorts from resistance. Other than this, we still hold the bearish bias on Gold till it taps the 1772 level.

- Market structure: Gold tapped 1795 previous week and was stalled by the strong resistance area. The resistance area of 1772 was earlier broken with force and was not retested. Therefore, Gold has to come back to consume its orders from the order block at this level. The support we are targeting for profit taking is 1772. It should be noted, Gold's trend is bullish now and the short setup we are anticipating, it’s just the corrective move.

- Trendline: Gold had an ascending trendline formed, which was pierced with force of a full bearish candle. The validation of the breakout sell was complete after the market formed candles below the trendline- opening and closing. After the trendline break, Gold retested the resistance area once more and continued moving down.

- Retracement: The golden retracement level of 75-78.6% aligns with the resistance level and is at a price point of 1792. Given the resistance level is also a supply zone, the retracement level will play out strongly. The impact has already initiated to absorb the move down.

- EMA's: EMA 200 is bearish and EMA 50 is bullish. This EMA divergence emerges when market tends to range. The EMA 200 was retested at the resistance level, which adds to a confluence factor for our short trade plan. After the break of the EMA 200, Gold had left the EMA without retesting. As this is the first retest of the bearish EMA 200 break, we can expect a strong reaction of the prices. EMA 50 broke towards the bullish side, again leaving the retest untested. Therefore, we expect the retest of EMA 50 to take place in confluence with the support. This EMA 50 retest will be our first profit target. Gold is basically ranging and narrowing down within the EMA's.

- RSI/CCI: Both oscillators started to decline after tapping their over-bought regions. Currently, RSI is at 51 and CCI at -34. This depicts the RSI still needs to break through the 50 level to turn bearish, whereas CCI, is already bearish. We also see a bearish divergence formed on CCI. Given the CCI first pivot point of divergence was at an over-extended level of 323, the impact of this divergence has major strength.

If we break the resistance to the upside on H4, we will consume our loss and lay off our short positions.

Reminder of GOLD intraday shorts for the week

Aug 22 2021

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