Hanging Man In Gold – Can we sell again?


Gold traded exactly as I discussed in my previous update, helping us secure more than 40 pips before reversing to $1244. But, now the Gold is sliding below the same level of $1244 as the dollar is showing some support near its multi-month lows.

 

Okay, looking at the Gold chart, I don't see much difference in trading conditions. On the daily chart, both of the momentum indicators, the RSI and Stochastic are holding above 80 & 70 sequentially.

 

This signifies that gold is overbought and it may drop to complete a 23.6% Fibonacci retracement at $1233 and 38.2% retracement at $1228. But, we need to keep in mind the ECB monetary policy decision is still pending today, which may influence gold.

 

On the daily time frame, Gold formed a hanging man candlestick which is known for bearish reversals. In the absence of fundamentals, the market is surely a nice sell. To make more efficient decisions, refer to Fx Leader Candlestick trading strategy.

 

Gold - Daily Chart - Handing Man Pattern

Gold – Daily Chart – Handing Man Pattern

 

Gold Trading Idea

I have opened a sell signal at $1238.50 with a stop loss above $1242 and take profit at $1235. Plan B is to enter a buy order at $1228. Alternatively, we need to keep in mind that $1244 is a major level, the breakage can make gold more bullish up to $1252.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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