Gold – What is it doing now?

31 Jul - Gold Daily Forex Chart

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Hi All,

Just a quick update on Gold. After seeing the Engulfing bar on the 15th July (see article), I took a short trade and price became really choppy. Thankfully, it was a break even trade. Since then, the market hasn’t given me anything substantial yet.

So, instead of looking for more, I thought I’ll zoom out again to see what’s happening in the bigger picture. Looking at the chart above, price has been making Lower Highs (LH) since May 2013. This was also after the major break below the strong support level around 1525 (around April 2013). Interestingly, price gave us a double bottom between June and Dec 2013 – which is essentially a flat bottom too.

So What Does this Tell Us?

Well, to start off, it seems to me that the Tug-of-War (mentioned in June 2014) is going to linger on a while longer. To be honest, this is going to be longer than I expected. If price continues to move lower, the consolidation (which started about a year ago) looks likely to stay on for at least another few months, and this then form a nice ABCDE pattern (also a descending triangle).

Of course, price could surprise us and start making an up trend again, of which, we could potentially see an abc pattern (of a smaller degree). The significance of that is we’ll get new higher highs.

Thank you and happy Trading!!

 

Note: Interested to learn more about Market Psychology? Check out my book on How to Read Price Action? Alternatively, find out more about abc patters and how to find market pullbacks here.

 

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