Let’s Trade A Triple Bottom – Potential Trade Idea In Gold

Posted Tuesday, June 13, 2017 by
Arslan Butt • 2 min read

On Monday, the precious metal continued to trade bearish for the 4th consecutive trading day at $1263 merely due to the back of growing demand for the US dollar. However, later in the New York session, the weakness in the equity market underpinned the demand for haven assets, but only to a limited extent.

However, the situation is totally different now. The gold prices are barely moving in anticipation of the FED (Federal Reserve) decisions ahead. The Federal Open Market Committee (FOMC) will presumably lift its benchmark rate from 1% to 1.25% on Wednesday.

But, In my opinion, most of the interest rate hike sentiment is already "priced in" and now the investors are waiting for the actual fact. Today, the game is in the technical analysis court thus let's have a real quick look at the technical side of the market.

Forex Trading Signal – Idea 

Today, I'm focusing on the $1262, a crucial trading level. I also recommend taking a buy entry above with a minor stop loss of $1259 and a take profit of $1270/71.

On the flip side, sell positions only seem suitable below $1262, with a take profit of $1256.

Gold 4 -Hours Chart - Triple Bottom Pattern Gold 4-Hour Chart – Triple Bottom Pattern 

 

Technical Outlook – Intraday

Firstly, we can see a triple bottom pattern on the 4-hour chart which is extending a solid support at $1262. More specifically, the precious metal has also formed a test bar right above the support level, signaling investors' strong sentiment to catch the retrace.

In addition, the 50- periods EMA is supporting traders' selling sentiment. The leading indicators, including the Stochastic and the RSI, and the metal has entered the oversold region. That's why we need to focus on the $1262. It’s the crucial trading level today and the breakage of this particular level will determine the market's further trends.

 
 
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About the author

Arslan Butt is our Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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