Gold – Bullish Bounce After Flat Pattern?

2 min read
HubertM

HubertM

Author

Dear Traders,

Gold has dropped hard in the light of a strong USD rally but a bullish bounce could be around the corner.

Today’s analysis will provide a brief technical analysis for GOLD and highlight potential trade setups.

Completion of Flat Correction?

Gold has dropped into an interesting bounce zone. It has retraced into the 100% zone (around 1300) of the swing that could have been wave A of a flat pattern. Momentum indicators are beginning to develop divergence within the latest bearish swing, and we had an initial bounce near the 1300 round number. It is quite possible for price to come back down again to restest 1300, and even move below it, into the 1280 area (138.2% Fib retracement).

This entire zone is very interesting for new long positions because a bullish impulse ought to follow after the completion of this bearish swing. Even if the pattern is something other than a flat, an upwards correction will be due in the worst case, which makes long positions around these levels a higher probability.

Trade Setups

Aggressive traders could consider entering long positions at the retest of 1300 or wait for a drop lower towards 1290 or 1280, while a more cautious approach would be to wait for price to re-establish itself on the bullish side of the 4-hour chart 21EMA before entering. Potential targets are the top of the previous range at around 1365, and beyond this towards 1380 and 1400 which would be further Fibonacci targets.

All the best along your trading journey

Hubert

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