Gold within Diamond pattern / Selling order activated

6 Apr 2022

Gold's general commentary: Two important things on E.U. opening. First, even though the Price-action broken the Lower High’s trend line from #1,900’s earlier, it failed to test the #1,942.80 Resistance zone, so Technically Price-action is still above Lower High’s just non-linear resemblance. As discussed on my remarks, as long as the #1,942.80 Resistance Zone holds, Gold is Bearish on the Short-term. Second, the Hourly 4 chart’s Support zone is still untouched, so Technically I don't have confirmation of more serious decline. Most likely, I will get needed confirmation as Trading week comes to an end, so patience if during this flat session / weed nothing happens. DX is on recovery candles and is above Friday’s session High’s as this is fulled even more by the spiral uptrend on Bond Yields. Gold remains relatively High under the circumstances. Price-action continues to consolidate on the Hourly 1 basis as my prediction regarding yesterday’s session Bull trap was on the spot. I was on sidelines since I knew that there are big chances of Selling pressure on Gold since Bond Yields didn't suffered big hits. The Bearish U.S. data were unable to stop the DX index from making another parabolic jump (now widely above #98.90). Regarding ATH levels, personally I don’t think that Gold Technically and Fundamentally equipped for such High’s (at least for current session), especially with peace talks negotiations near agreement. Gold’s #2,000.80 per ounce was the greatest Bullish trap made by Fed, sharply cutting rates and now slowly raising.


Fundamental analysis: Bond Yields panic continues as Investors (as usual) use Gold as a safe-haven, but that phenomenon was short-lived. Final Resistance is not compromised and if Gold closes today’s session below it (#1,942.80) it is sign of that Bullish potential is near the end (or at least showing signs of exhaustion) and is messenger that consolidation sessions spree might be over. Personally, with RSI in the middle of consolidation Rectangle and Bond Yields on Bullish Daily chart's candles, I doubt that I will see some Bullish on Gold action throughout today’s session. Friday's session Gap is filled, Daily chart got the necessary Technical correction as I should be seeing a continuation of the downtrend back towards the Support priced at #1,882.80 configuration. That would be on any other occasion however as due to Fed tightening speculations and cautious sentiment (possible hawkish stance), market is not under normal conditions. This is obvious as DX is Trading within Daily chart’s healthy Ascending Channel (Upper zone) aiming to yet another Higher High’s peak and Bond Yields on a spiral uptrend (strong Buying rally). This configuration adds more Selling pressure on Gold regarding Short-term. In my opinion Bond Yields are they key, if they extend their recovery (and DX makes it’s third Bullish Daily chart’s engulfing candle) Gold will follow it’s Technical Bearish course towards fair Technical Price (Medium-term). Otherwise it will have to be postponed until end of the week. I am not willing to Buy Gold as these are Fundamentally driven sessions, as Technical rules don’t apply much in similar situations.


Technical analysis: At the moment, the Price-action is merely consolidating regarding Hourly 4 chart, as I am not making strategy shift so far. The Price-action has been struggling to get past the #1,942.80 barrier all session long (yesterday's U.S. opening Bell) as the possible Double Top formation and Daily chart’s Resistance zone applies Selling pressure besides Bond Yields on Weekly peak's. However, with the Fundamental reports announcements reaction staying flat and Bond Yields managing to make Bullish comeback - Bullish outlook on Gold is postponed, but not invalidated. However, the downside offers more potential and I will wait for the rejection again on early U.S. opening Bell. Unless the Trade war escalates down the road, which is a largely unpredictable factor, Gold will engage the correction. #1,917.80 is the pressure point to monitor.


My position: As Gold is about to break the Hourly 4 chart's Diamond pattern to the downside, I have been limiting my risk and remaining on sidelines for the last #2 sessions. I believe Gold is a Selling option as Price-action reached my desired Selling area, I have engaged my Selling order with #1,920.80 as an entry point. I expect FOMC meeting to go in my favour (hawkish stance) where Gold may test #1,890.80 configuration on Intra-day basis.