Gold isolated within Neutral Rectangle

١٥ أغسطس ٢٠٢٢

Gold's general commentary: Nothing out of the ordinary at the moment as Gold is under strong Buying pressure as DX was on parabolic uptrend, with smaller than usual Volume throughout Friday’s session, as discussed Gold was under evident Buying pressure (but respecting my Resistance zone at it’s maximum). I still don’t have Selling confirmation as DX cannot price the proper Resistance zone and is mixed on every Hourly 4 chart’s candle. As soon as DX breaks the Resistance, Gold should break all Support levels on a heavy Sell-off. I cannot expect an sustainable reversal before the firm #1,773.80 - #1,776.80 Support cluster break. My estimations are indicating strong Price-action devaluation. Regarding Bond Yields Daily chart, Double Bottom (one of the biggest Bullish patterns can serve as bounce back point and could attract Investors to park their capital on Yields again, as Fed could renew the Buying spree aswell). I note ''bounce back'' because it is where most new Buying orders are accumulated, pushing Gold downwards for every failed Buying attempt. Current Technical fractal on Bond Yields printed Double Bottom, connecting with March #2 pressure point. I am not interested in Buying Gold on both Short and Medium-term, unless #1,808.80 - #1,815.80 breaks and market closes above on full bodied candle (slim chances). These are Volatile times on Gold but all will be overshadowed when the trend appears (downwards).


Technical analysis: Gold remains Bearish on Hourly 4 chart’s basis and will continue to do so as long as the Daily chart’s #1,808.80 - #1,815.80 belt is holding. The Lower High’s zone (September #30 fractal) is about to break if Gold close a full Daily chart candle below #1,778.80, or typically break #1,772.80 (November #30 Low’s trendline, and rejection on December #15). I will wait out for isolated area to be engulfed and then make my move, as it is difficult to speculate where the Fundamental pressure will guide Gold, as fair Technical Price should be below #1,752.80 by now already if there was no parallel Buying pressure coming from mixed values on DX. Technically, I see the potential for an Descending Channel extension on Hourly 1 chart as sustainable (when occurs), calling for #1,752.80 configuration, as market is Trading on Fundamental catalyst where DX was losing with every candle, engaging Daily chart’s parabolic downtrend, and now correcting losses on spiral uptrend. Tight session today and personally, I don’t think that current session can deliver more action. With Buying pressure evident from former DX decline (which was later on Bought), Gold remains strong near new Intra-day High’s but there are certain aspects that make me sceptical on whether or not this can be sustainable. Those are: Extremely strong recovery on Bond Yields with the #10Y near the October Resistance (with DX on losses counterbalancing the rise on Bond Yields, it is indeed an clash which side / stronger correction marker will prevail). In addition to that the Usd-Jpy has reversed Intra-day and are near a #4-session High. Based on the above, Gold shouldn’t be above its Short-term Resistance belt.


Fundamental analysis: It is important to note that the Price-action was Trading above the Daily chart’s Bollinger band (Upper Line) as there is still room for the downtrend. With all risks involved and #1,776.80 Support test possibility ahead, I will still give my Medium-term Selling setup an chance since Gold cannot continue to Trade on such Inflated prices for much longer. Stock markets had aggressive Bearish Gap fill throughout Friday's session, but had less or no impact on Gold, which removes it from main correlating assets list. Gold was soaring again driven by geo-political factors having broken the first Resistance of #1,800.80 (in the same manner representing psychological mark) visible on Hourly 4 chart, but lost momentum due to DX finding the Support and extending recovery candles. Once again Fundamentals worked favourably for Gold’s Buyers as DX invalidated both Support and Resistance zone all within #1 session. However, Daily chart is on strong Overbought levels and indicates that Gold may be on the consolidation candles as Monday’s U.S. session approaches. With the Stimulus news already digested by market, Inflation uncertainty and main correlating assets Trading / constantly adding Buying pressure (Short-term) - I cannot expect anything else than Gold to remain isolated within Neutral Rectangle for the session. This is configuration regarding Intra-day basis as on the long run, Daily chart’s wall of Resistance lines is ahead which rejected the Buying sequence near the multiple rebound points as the Weekly chart’s candle succession is calling for #1,678.80 fractal, announcing that Gold’s eminent uptrend is near exhaustion (pricing a Top here, temporary or not). Always keep in mind that as soon as DX (my strongest correlation at the moment) and Bond Yields Trades negatively for Gold (both on gains), aggressive takedown is next, while at the moment I have Neutral movements all along without firm pattern to Trade by.


My position: As I am Highly satisfied with my current Trading results and I see no Volume of Gold to invalidate the Neutral Rectangle, I will not Trade the current market sentiment and will sit out today's session, carefully observing the Price-action. As Gold is following DX mostly, engaging any kind of order is dangerous at the moment, as I will await tomorrow's E.U. session to make my move.