ABCD Pattern – Gold Bulls Looming at C

The bullion market is dominated by bulls, yet, the better than unexpected positive figures from the United States are hurting the bullish sentiment. It was a good decision to enter the market at $1271, but news prevented us from trading at the stop. No worries, I have another trade setup for today.

Key Technical Drivers

Looking at the 4-hour timeframe, the technicals are giving us multiple reasons to stay bullish in gold.

Gold – 4-Hour Chart – ABCD Pattern & Channel

– First of all, the gold has completed 61.8% retracement at $1267 and the same level is working as a solid support for gold.

– In the ABCD pattern, the $1267 is working as a C point. Bulls can enter the market now to aim at D somewhere near $1296 this week. Keep in mind though that it's possible only with the help of fundamental support. The FOMC meeting minutes is exactly the event for that kind of fundamental support.

– Gold has formed a bullish channel which emphasizes the long term gold bullish trend.

– Lastly, the leading indicator Stochastic (3) is massively oversold and signifying no further room for selling now.

Gold Trading Plan

It will be nice to stay bullish above $1267 with a stop loss below $1262 and take profit of $1278. Stay cautious traders, the FOMC meeting minutes may cause some unpredicted volatility today.