Gold Traders Awaits Breakout – Sideways Trade Setup
Arslan Butt • 2 min read
The safe haven asset Gold is playing hide and seek with the market as its trading in a narrow range of $1276 – $1282. It goes beyond these levels but always fails to sustain the trend. That's because investors aren't seeing any fresh reasons to play the market.
However, our previous forex trading signal on Gold hit profit at $1278 and right now the Gold is holding at exactly above the same level. It's really surprising to see that the investors are not even following the negative correlation between the U.S dollar and Gold. Both are trading bearish at the same time.
Due to the diversions, namely the U.K prime minister Theresa May proposed general elections, investor's attention is stuck with the bullish sentiments of the Sterling and the Euro. Hence, they have ignored the ongoing tensions between the U.S, North Korea, and Syria.
At the moment, we have to wait for the New York session and the release of the Philly Fed Manufacturing Index, as well as the Unemployment Claims figures from the United States.
Gold – 4 Hours Chart
Looking at the hourly chart, the Gold is trading in a descending triangle which is extending support at $1277 and resistance at $1282. The prices have tried to break the lower range a couple of times but did not succeed. Let me add that descending triangles are meant to break downward.
The RSI is slightly bearish/neutral, whereas 50 period EMA is signaling a bearish sentiment for the Gold. The setup seems to be good for choppy trading, but still, it's really risky as we never know when it's going to breakout. However, the logical guess says we will see a breakout in the New York session today.
Forex Trading Signal
I will be comfortable selling below $1282 with a stop loss above $1284 and take profit at $1274 & $1271 only if the Gold breaks downward.