Our second take profit in gold is trading as we had in my previous update and has hit TP. Bullion market is still looking for a good enough reason to show volatility and ultimately breakout and it's quite possible that will happen today. Let's find out how!
Looking at the hourly chart of gold, we can see it has just tested the $1265 support. So by now, it has become a double bottom level. It's dropped from $1272 to $1265, thereby, the Stochastics have entered the oversold region, signifying potential for a bullish reversal.
Gold – 2-Hour Chart – Sideways Trend
However, the price has crossed below 50- periods EMA at $1268. Is this the start of a bearish trend? We can't honestly know that until the gold breaks below $1264 today.
Investor sentiment is the cause of the drop in gold below $1272. The ADP Non-farm is forecasted to add more jobs than the last month. If this really happens, the US dollar will get stronger, making the gold weaker during the New York session. So, why not take a sell position now? That's how speculators are thinking at the moment. Check out our FX Leader's article on trading the market sentiment to stay one step ahead.
What's The Plan Now?
I'm already in at $1265 and looking to target $1268 and $1270 with a stop loss below $1261. The ADP Non- farm will be a market mover today. Hopefully, we get our profit before the US session or our trading signal will be at risk.
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