Gold tends to struggle after Pricing Hourly 4 chart's High's

2022年1月11日

Gold's general commentary: The Lower High Bull trap towards #1,808.80 is almost delivered (#1,806.80 Trading prices at the moment, well explained throughout my yesterday's commentary) on a very strong Hourly 4 candle as the Ascending Channel attempted to bring last week’s Oversold Hourly 1 chart levels to a balance. This pullback was led by DX again on mere decline (still Bearish candle # -0.14% towards #95.80), and Bond Yields on #10-Month High’s (Fundamental sentiment) which made me sit on sidelines until new Price-action opportunity emerges. The week is now almost flat (# +0.04%) but the Monthly candle may close near a respectable # +0.27%. This remains an undisputed Medium-term Bearish trend . Always consider the Medium-term trend when determining your positioning along with the Highly correlated instruments ( DX and Bond Yields at the moment, along with Usd-Jpy pair). For Medium-term Traders, the trend is still Bearish so a practical suggestion would be to Sell every rise to the Rectangle's Support within #15 points. I remain Bearish (Medium-term), but without good Risk/Reward ratio, I will remain on sidelines, waiting for #1,792.80 test. On such pace it is not impossible to close the week on marginal dips. The Monthly candle however remains on a mere # +0.27% and below is a negative close, so practically the Bearish Short-term is unchanged. I will comfortably await for an #1,792.80 break.


Technical analysis: Gold is Trading an interesting Technical fractal on the Hourly 4 chart. The dominant pattern on a Daily chart however is a Descending Channel since the January #3 High’s. Since December #14 variance, the Hourly 4 chart’s RSI was Ascending (currently rejected from December #31 Higher High’s), which was on a Bearish divergence with the actual Gold’s Price-action which is headed towards Higher Low’s and Lower Low’s zone. I have seen the exact same sequence throughout August #20 - #26. The RSI was then Ascending too, while the Price-action made #3 Lower Low’s on the Bottom trendline of the Descending Channel . That suggests that Gold may be pricing a Top here (temporary or not) within #1,800.80 - #1,805.80, which successfully rejected the Price-action, and taking December #31 RSI Resistance into consideration, it is natural to expect that Gold should normalize the Overbought Williams% condition, where next major move towards Lower levels should not be treated as an Technical surprise. DX is pulling back (# +0.27%) while equities are rising, so I believe that soon Gold will make a Lower Low’s run towards the Hourly 4 chart’s Support of #1,783.80 (last week’s Low), unless #1,808.80 breaks first, in which case Gold turns from Bearish to Neutral regarding Short-term. In addition, another fact to speculate the downtrend is that Gold gets rejected on Top of the Descending Channel #3 times and then prices a major move (every move which is occurring #3 times or more can be treated as an cycle) and Hourly 4 chart was at it’s highest Technically it has been since early December’s fractal / Overbought on all major’s RSI indicators. Keep an eye on the Bond Yields and DX in order to accurately track the markets on Short-term as the Medium-term has now the Daily chart’s #1,766.80 as Support and #1,821.80 as Resistance (which is considerably Higher). However, the Daily chart’s RSI is seen Trading idle levels but in fact far away in points from the March bottom of #30.00. Typically when the RSI hits these levels it arises Sellers and that has been so consistent since the August #2018 market Bottom. The downside Short-term potential is #1,700.80 - #1,727.80, while on Medium and Long-term, #1,678.80 is surely on the cards. Gold always tends to price the High’s every #5 to #8 sessions, as, according to the cycle, major move will be revealed within current week’s borders.


My position: As explained throughout my yesterday's commentary, if #1,800.80 barrier breaks, #1,808.80 will be filled which should be treated as a Top. Even though Fed had hawkish projection for Gold , it is difficult to explain which factor is constantly Buying recent Low's, turning them into a Short-term recoveries. However, I do not mind current Price-action, but am not willing to Buy Gold as every rise back above #1,800.80 barrier is proven to be classic speculation which can be reversed anytime, and that's why Buying Gold on Short and Medium-term is carrying a certain level of danger every time. I will comfortably preserve my capital and await #1,792.80 test, where if broken, I am expecting #1,783.80 test which I will follow with my Selling order. My current Trading results are excellent so I am comfortable with waiting. If #1,814.80 breaks, #1,821.80 is the next extension.