On a higher time frame, gold is still bearish but on H4, it is currently in a correction phase and tends to reach the potential resistance where we will be looking to short it. The potential price of the shorts is 1870. This price, has a magnitude of sell orders which can drive the price down massively. Earlier the price we had to start the bullish structure was at 1826, which was breached, and will act as a support now. This support has weaken due to multiple touches on the support level. That being said, we are still bearish on the pair and will continue looking for shorts.

Gold is basically in an ascending channel, which depicts the bearish continuation pattern. This will be confirmed after the market takes the breakout sell from the trendline and has been validated by opening and closing below the trendline. With this, we will add another position. 

The resistance level is in confluence with the golden retracement area of 75-78.6%. This level of confluence is strong enough to bring th gold down. 

EMA 50 has just been breached for the bullish side but the EMA 200, is still bearish and has not been tapped yet. The death cross is still bearish. The EMA 200 might be tapped and be in confluence with the resistance and retracement level. This cofluence of multiple technical factors will be a strong foot hold for the market to continue down from h4.

RSI and CCI are at 63: 92 respectively. There is minor window towards the over bought area. We are anticipating the market to tap the over bought area and then continue moving down. We may see the oscillators form a bearish divergence. This divergence will act as a final catalyst for the bearish leg.

Shorting gold from a premium level

Vasl Capital

May 22 2022

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