Selling the Retrace in Gold at the 20 SMA
Skerdian Meta • 1 min read
GOLD has been really bullish this year, with the uncertainty increasing globally, due to the coronavirus and the economic impact that the lockdowns had. It surged higher from the middle of March, and according to my charts, it reached $ 2,075 on August 7.
But we then saw a brutal reversal, which took the price more than $ 200 lower in just a few days. Buyers tried to get the bullish trend going again, but since then, the highs have been getting lower, which is a sign that the pressure is shifting to the downside for gold.
On Monday this week, we saw another strong decline, as the USD gained momentum. The US economy is recovering well, despite the unrest, and this is helping the USD, while Europe is slowing down, with services falling into contraction again this month. Gold retraced higher today, but the 20 SMA (gray) provided resistance on the H1 chart, which is also an indication that buyers are weak.
We decided to open a sell forex signal in gold below the 20 SMA, and now the price is reversing lower again, so let’s hope that the bearish trend resumes soon. Although, we will have to wait for FED chairman Jerome Powell’s speech and the US manufacturing PMI report later in the afternoon.