Gold was in a bull run recently, till it reached the strong supply/resistance zone where it needs to exhaust for any further push up, if any. Therefore, currently standing at the resistance level, gold is at 1833. This level can be played as a catalyst for the market to push down. It is to be noted that on a higher time frames, gold is bearish and on weekly, it is still in a range.

The ascending trendline from the daily is in play as it broke out for sells, with price action validation. After the breakout sell, the market retraced back towards the golden area retracement, which completes our setup for shorts. On the other hand, we have another H4 ascending trendline in formation which is still below the trendline. On the other hand, the resistance trendline has been rejected by the prices.

The golden Fibonacci retracement aligns perfectly at the resistance level. This confluence formed at 1835-1838 is a strong indication that market may reject form this area. The strong element to this retracement is the fact that it’s a daily retracement level which tends to play out strong.

Both the EMA’s are bullish with a bullish death cross. Market broke out the EMA 50 and EMA 200 and is due a retest of either of the EMA’s. At the support level, we analyze the retest of the EMA 200. The EMA’s being bullish are a sign of a weak confirmations for sells. That being said, we still anticipate the strength of the structure to pierce the EMA’s.

Both the oscillators are in a bullish region. RSI is at 63 and CCI at 133. The oscillators are expected to take a nose dive towards the bearish region once the market starts moving down. Apart from this, there is also a bearish divergence being formed on both the oscillators. Therefore, the confirmation has been added for shorts.

Gold sells is a decent setup. Once the market starts the decline, other lagging factors will start representing the bearish move.

Shorting gold from a golden level

Feb 10 2022

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