Gold Testing 50 Periods EMA – Update on Long Term Signal
Arslan Butt • 1 min read
What’s up, fellas.
The gold signal is in profit, but the 50 periods EMA is likely to push it lower. Is it worth staying in a trade or better to close it now? Let’s find out.
GOLD is trading moderately up on corrective rebounds following multi days selling trend which drove prices to four-month lows. On Wednesday, the US dollar index hit a new multi-month high, yet gold remained silent with no sharp selling, which is against the correlation of dollar. So it’s a signal that bears are exhausted and bulls are taking over the market.
Gold has jumped over 70 pips to trade at 1,277 and that’s exactly where we entered into buying position a couple of days ago. But the market kept moving against us and finally gave us an opportunity to close the trade at breakeven point.
Key Trading Level: 1274.55
The reason why we preferred to close the trade is the 50 periods EMA which is likely to provide solid hurdle at 1,277 along with resistance at 1,283. But at the same time, gold is entering the overbought zone which means, in a short timeframe, the market may give up some gains in the wake of retracement. So, let’s stay out of the market until we see a clear trend.