A Potential Buy Entry In Gold – ECB In The Spotlight
Arslan Butt • 2 min read
Good morning forex friends, the forex trading signal for gold did another exceptional job. Today, investor's focus will remain on the ECB. Though the ECB isn't expected to change rates, we never know if they will surprise us, just like the BOC did.
Gold traded exactly as we forecasted in "Gold hits 75 Pips Take Profit – Are you Ready for the Next Trade?" Now, the metal is consolidating in a narrow range of $1326 – $1343.
The technical view of gold is now slightly confusing, as most of the traders are absorbing shocks from the Bank of Canada. Anyways, it worked out really well for us. Remember, the forex trading signals suggested in "Trade Setups In Canadian Crosses – BOC In Focus" both of them closed at TP. I will discuss it more detail in my next update.
Today we have ECB on the table and investor's focus has shifted to their rates decision, coming out at 11:45 (GMT) & ECB Press Conference at 12:30 (GMT).
Key Technical Drivers
We can see on the 2- hours chart, gold already dropped to place a low at $1331. Remember we discussed the bullish channel, Gold is now in the middle of it. It has a room for both, bullish and bearish trades.
Gold – 2- Hour Chart – Bullish Channel
The leading indicators, RSI and Stochastics are oversold enough to give us a pullback in the Gold. However, the bearish moves are followed by a bearish marubozu candlestick, which demonstrates the strong selling intention of traders. Check out FX Leaders candlesticks strategy to enhance your profitability.
The lagging indicator, 50- periods EMA is supporting the Gold at $1330. The cross below this will add further selling until $1326 and that's where I'm seeing a potential for buying.
Gold Trade Plan
For now, I'm just going to wait for the market to retest $1326 to take a buy entry with a stop below $1324/22. On the flip side, I may take a bearish entry below $1343 with a stop above $1347. Good luck!