100 Pips Closed In Gold – What’s Next?
Arslan Butt • 1 min read
In yesterday's update, Gold On Fire – Risk Off Sentiment Rolling the Market, I shared a forex trading signal selling gold below $1326. The trade went really well and helped us bag nearly 100 pips. Here's what I'm planning for today…
Quick Update on North Korea
As my colleague, Rowan updated in the morning preview, geopolitical tensions eased after the United Nations condemned North Korea's "outrageous" firing of a ballistic missile over Japan as they demanded to halt its weapons program.
All this became worse on Tuesday morning after the mounting geopolitical tensions over a new North Korean missile launch triggered the demand for safe-haven assets.
Gold's Technical Outlook
The gold has traded exactly as forecasted yesterday. Here are today's key technical points:
– Completed 38.2% retracement at $1306, and it's forming Doji candles above it. This represents investors' neutral sentiment.
Why are investors neutral? Perhaps, due to the top-tier fundamentals coming out in the U.S. session today. ADP non-farm and U.S. GDP figures are at the top of that list.
Gold – 2-Hour Chart – Fibonacci Retracement
– Stochastic RSI is in oversold territory, which is another reason for not entering into sell now.
– Today, we need to monitor $1306, as breakage below this level is likely to push gold deeper towards $1295.
Gold Trading Plan
Since the metal is massively oversold in the 4-hour chart, my plan is to try a buy position at $1306 with a stop below $1303 and a target of $1313. Traders, keep in mind that the US session may provide us with some unpredictable movements upon the release of fundamentals. Make sure to follow strict money management to stay safe.