Gold seemed to have found a level of Resistance. The price produced a good-looking Bearish H4 candle day before yesterday. It produced another Bearish H4 candle yesterday as well. It looks like a Double Top is being formed on that Resistance level. If the price comes down by making a breakout on the Neckline of the Double Top, then Gold is going to head towards the South by offering us a Short entry. Let us have a look at the H4 Gold chart.
Gold Price Action Analysis – 8th Nov 2018
The level of 1227.70 is the level of Resistance here. However, Double Top’s Resistance lies further up as we see. On the other hand, the level of 1222.45 is the level of Support that is to be broken by an H4 candle. In fact, this is the neckline of the Double Top. If that level gets broken by an H4 candle and it produces an H1 Bearish Engulfing Candle later, then the price would head towards the level of 1213.80 without having that many pauses. Let us have a look at the summary of the trade…
- Sell Stop Order: 1222.45
- Stop loss: 1227.70
- Take Profit: 1213.80
- Validity: 72 hours
- Whenever possible, move the stop loss to the entry price and whenever you want, you can take profit anytime as long as you feel comfortable
There are two high impact news events today at GMT 19.00. The news events are “FOMC statement” and “Federal Funds Rate”. Gold has a deep relation with the USD. Thus, Gold market, in fact, XAUSD might get to its extreme volatility. It would be best to take the entry if the signal comes just after these news events.
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