Gold Breaks Bullish Channel – Time To Trade Bearish Dragon Now

Yesterday, the Gold traded exactly as we forecasted in our earlier update Choppy Session In The Gold – Is it a good time to short? The Greenback has had a tough week as the dollar index continues to trade bearish. We may see another wave of volatility during the US session today in the wake of high impact economic events.

GOLD / XAUUSD – Bearish Dragon

Traders, you can see on the hourly chart below, the precious metal Gold is peaking out of the bullish channel and the closing of candles outside the range $1,342 – $1,336 is representing the bearish bias of investors.

Gold – Hourly Chart – Bearish Dragon

The harmonic pattern called bearish dragon is also in play. It has completed the C to D leg $1,336. Since this support level is broken, now it’s likely to work as a resistance for the Gold. Lastly, the lagging indicator also had a crossover at $1,336. So, we can’t ignore the importance of $1,336 today.

Support     Resistance

1334.6    1342.4

1332.2    1344.8

1328.3    1348.7

Key Trading Level:    1338.5

Gold // XAUUSD – Trading Plan

The idea is to stay bearish below $1,337 with a stop above $1,341 and take profit at $1,331 and $1,328. Good luck.