Oct. 20: Bullish Gold – Tug of War between Fundamentals and Technicals
Arslan Butt • 1 min read
Happy Friday traders. We are closing another profitable week. The forex signal on commodities and currencies did exceptionally well. Yesterday, we didn't open the Gold signal due to a sudden change in the fundamentals. Here is a reason behind sudden bullish waves in Gold.
One of the reasons behind bullish Gold prices was the political uncertainty in Spain after Spanish Prime Minister Mariano Rajoy said the country would trigger Article 155. This allows the government to take control of Catalonia after Catalan Leader Carles Puigdemont disappointed to abandon the region’s push for independence.
In response, the European stock markets tumbled dramatically and the investors rushed towards the safer investments such as Gold and Japanese currency pairs.
Gold // XAUUSD – Technical View
Due to sudden changes in the fundamental scenario, the technical side became distorted. Taking a look at the 3- hour chart, the Gold has reversed above the 61.8% and Fibonacci retracement at $1,278.
Gold – 2 – Hour Chart
The 50- periods EMA is providing resistance to Gold at $1,289 and that's exactly the level where Gold reversed previously after forming a Doji candle. So, it seems to be a good level to short Gold today.
Gold // XAUUSD – Trading Plan
Today, the Gold is likely to trade in a range of $1,277 to $1,289. We can take a quick short position below the upper range of $1,289 with a stop loss above $1,292 and a take profit of $1,280 and $1,278. On the other hand, it will be nice to take a buying position above $1,275. Good luck and have an awesome weekend!