Let’s Catch The Retracement – Gold Trade Idea!
Arslan Butt • 2 min read
On Friday, the gold prices skyrocketed to set a high of $1279.01 in response to the U.S. labor market figures. This allowed us to close our buying trading signal at take profit. However, the Asian investors joined the market, not only to trade the unfavorable U.S. Non-farm payroll but also for a few other reasons.
One reason is that today, in the Asian session, the gold gained support after the weekend terror attack in London. The attack killed seven after a van drove into walkers on the London Bridge. Later, the attackers began to kill people at nearby restaurants. The attack caused panic amongst investors.
Besides this, investors jumped to invest in the gold when Saudi Arabia, Egypt, the United Arab Emirates (UAE) and Bahrain accused Qatar of backing terrorism and consequently tcut their relations with Qatar. This really was a surprise to the global world, which lead to a hike in haven appeal and a fall in demand for equities.
Forex Trading Signal
In the Asian session today, we shared a sell call below $1280 with a minor stop loss of above $1283 and a take profit of $1276.6.
Gold Hourly Chart – Fibonacci Retracement
Technical Outlook – Intraday
On the daily chart, we can see a clear bullish engulfing pattern with a high shadow on the lower side and most of the body on the upper side. It demonstrates that on Friday, sellers entered the market but failed to compete with buyers.
The dominating buyers took control and made the precious metal even more precious. At the moment, the momentum indicators, RSI and Stochastic, are both entering the overbought trading zone, revealing that buyers may get exhausted and take the profit.
The immediate resistance is found at $1282.50. Below this level, the metal can drop towards the next support level of $1276 (23.6% Fibonacci Retracement level) & 1273 (38.2% Retracement Level).