Choppy Gold Trade – A Potential Breakout Setup

Despite the volatile session, the gold prices are stuck in a narrowly mixed range of $1,295 - $1,305. Now, the game is in the court of the..

Gold - 4 Hour Chart

Despite the volatile session, the gold prices are stuck in a narrowly mixed range of $1,295 – $1,305. Now, the ball is in the U.S. Nonfarm Payroll’s court. Today’s labor market data is of interest not only to traders but also to central banks. Since it’s being released before the June 13 FOMC meeting, it could have an influence on the decision of FOMC members regarding the next rate hike. Check out FX Leaders’ June 1 – Economic Event Report to learn about NFP expectations.

 

Gold’s Technical Analysis – Sideways Channel

On the 4-hour chart, gold is testing $1,295, probably for the 8th time now. On Thursday, the precious metal soared below $1,306 but failed to violate this triple top resistance at $1,306. For the moment, the yellow metal is holding below a solid resistance level of $1,306 which is extended by sideways channel. This pattern shows the indecision among investors and could breakout in any direction.

Gold - 4-Hour Chart

Gold – 4-Hour Chart

Fortunately, we have already spotted the pattern and we also know the time of a potential breakout. The violation of $1,306 level can open further room for buying until $1,311 and $1,317. The support prevails at $1,287 and $1,281.

 

 

Support    Resistance

1296.57     1304.37
1294.17     1306.77
1290.27    1310.67

Key Trading Level: 1300.47

Gold – XAU/USD – Trading Idea

The idea is to buy above $1,295 and sell below $1,305, with a stop loss of 30 pips and take profits on 50 pips. Outside this range, we can set the buy stop above $1307 and sell stop of $1,294 to target 50 pips. However, it’s a risky strategy if we get mixed data today. Trade with care and good luck!

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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