Gold shooting star - Bearish Potential After Stop Runs
Gold prices came into the week clinging to a range that had held for the past couple of weeks.
Before that, price action had pushed below a bear flag formation, eventually setting a near-term low around 1763 with range support holding around the 1770 level.
FOMC brought a quick push of USD strength, which helped Gold to temporarily breach that support. This likely triggered a plethora of stops that were set just below range support, after which price was ready to jump from a fresh low at 1753 and back up to 1792, which brought breakout potential into 1800 and 1815. I talked about that setup here: twitter.com/JStanleyFX/status/1471470252869443590
Today saw the bullish breakout run all the way up to 1814 but price was unable to test through 1815, again, likely taking out a plethora of stops that were lodged above range resistance.
A reversal began to show thereafter, and today's daily bar closed with a shooting star formation, often followed with the aim of bearish reversals. That formation also showed at a key spot, inside of the 1815 level and around the underside of a bear flag formation.
This can make the short side of the matter attractive, especially for those looking for a continuation of USD-strength. And given the fundamental outlay from the FOMC this week, where the bank highlighted the possibility of as many as 5-6 rate hikes over the next two years, there could be ample motive for USD-strength to continue.
Before that, price action had pushed below a bear flag formation, eventually setting a near-term low around 1763 with range support holding around the 1770 level.
FOMC brought a quick push of USD strength, which helped Gold to temporarily breach that support. This likely triggered a plethora of stops that were set just below range support, after which price was ready to jump from a fresh low at 1753 and back up to 1792, which brought breakout potential into 1800 and 1815. I talked about that setup here: twitter.com/JStanleyFX/status/1471470252869443590
Today saw the bullish breakout run all the way up to 1814 but price was unable to test through 1815, again, likely taking out a plethora of stops that were lodged above range resistance.
A reversal began to show thereafter, and today's daily bar closed with a shooting star formation, often followed with the aim of bearish reversals. That formation also showed at a key spot, inside of the 1815 level and around the underside of a bear flag formation.
This can make the short side of the matter attractive, especially for those looking for a continuation of USD-strength. And given the fundamental outlay from the FOMC this week, where the bank highlighted the possibility of as many as 5-6 rate hikes over the next two years, there could be ample motive for USD-strength to continue.
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