Gold has been ranging since last Thursday. At this point, it is resting at the resistance level, which also happens to be a head and shoulders resistance. Price action has dictated an engulfing and we can see a continuing sliding down on the gold. Our target will be the higher time frame support.

The 61.8% retracement is in confluence with the resistance level. This will strengthen the resistance to push down the market.

On gold, we see an ascending trendline, which has been broken out for sell. This breakout sell has also been retraced to the 61.8% level. This confirms the parameters being fulfilled for the breakout sell strategy.

Both the EMA’s have been in a bullish momentum. The EMA’s have a bullish death cross and EMA 200 will be retested at the support level. We assess that the EMA’s will be broken out given the higher time frames structure.

CCI is in a bearish region, whereas RSI, is at 51, which indicates a bullish momentum. There is a high chance that RSI turns bearish after breaking the 50 level towards the downside and continue going down.

Gold has been consolidating previously. With this much order flows in this range, the spike out the range can garner us good reward on the basis of reward.

Head and shoulders formed on Gold

Jan 17 2022

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