Bearish Gold & The Eurozone – A Potential Trade Idea
Arslan Butt • 1 min read
Our analysis on gold was quite successful as the Gold began trading with a huge gap in the Asian markets today due to Macron’s victory in the 1st round of the French Presidential elections. You must be thinking, what does the Eurozone have to do with the precious metal Gold?
Over the past few weeks, the market has been under pressure due to ongoing geopolitical events which caused a great deal of uncertainty in the market. One of these events was the French Presidential elections. Out of fear, investors boosted demand for the safe-haven asset Gold, pushing its prices higher. Later, after the outcome of the elections, the investors gained confidence and consequently stopped their demand for haven assets which plunged the Gold prices to a multi-week low.
Gold – Hourly Chart
Technical Side – Intraday
The Gold has recovered almost half of its losses and is now trading near $1275. The technical side of the metal is shifting its sentiment from bearish to bullish. For example, the RSI has just crossed above 50 periods EMA and the Gold has formed a bullish engulfing candle in the 4-hour timeframe. Bullish engulfing is undoubtedly a buying signal but I see a major resistance near $1277 which is likely to keep the Gold lower.
Forex Trading Signal
Traders, I will be aiming to sell below $1277 with a stop loss above $1280 and a take profit at $1268. However, above $1277, the Gold has the potential to target $1284.