GOLD – Trading Plan – 9th June 2021

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Good morning Trading Floor team.

 

This week has had a very quiet start, the majority of currencies and commodities are trading at similar levels to the Monday open. We are still we are seeing sideways consolidation. Generally, economic risk events pick from Wednesday onwards therefore we should see fresh direction and liquidity increase this evening.

GOLD has been on our watch list for a while as the metal has broken a long term consolidation period suggesting the long term bullish trend is set to resume. There has been speculation that gold has been consolidating/edging lower due to money flows into the crypto market. Due to the crypto market taking a turn lower over recent weeks, money will need to find value in a different asset which brings attention back onto the precious metal space.

GOLD – 15-minute Charts

Generally, I don’t chart under the 1 hour time frame but I wanted to highlight the wave structure and potential buy zones. Wave can identify a 5 wave rise with an extension in the 3rd wave which is also subdivided into 5 waves. To enter this trade there needs to be a 3 wave decline into the 61%-38% FIB retracement zone. This will provide a buying opportunity from a lower price point. Alternatively, we are going to have some buy stop orders set above the 5th wave high in case of a clean breakout.

GOLD – 1 Hour Charts

The trading plan is to set a buy stop for a breakout above the recent swing high, I will also be watching for a better entry point on any pullback in the market. As always I will keep you posted on any market execution trades.

Trade Setup: BUY STOP – Entry price 1904, stop loss 1884 and take profit targets 1940-1960.

Stop loss: 200 pips

Take profit: 260-560 pips

AUDUSD – BUY LIMIT – 8th June 2021

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Good evening team,

From a fundamental perspective, the DXY may see some selling pressure in the near term due to a number of economic reasons. By now you should all understand the impacts of quantitative easing from the FED (increased money supply). Furthermore, there has been a decrease in the number of people looking to hold US dollars due to the devaluation and risk-on market sentiment. Therefore simple supply V demand strategy has pushed the USD lower since the covid-19 pandemic recovery. Now, this is where it gets interesting. Fresh reports coming from South America are suggesting there are a number of nations who are potentially looking to remove the USD as their legal tender and replace the currency with BTC. The President of El Salvador has already proposed these changes and countries like Paraguay, Brazil and Argentina are on the watch list.

These countries have been hit the hardest due to the extreme money printing from the FED, an example is looking at Argentina where the 12-month rolling inflation hit 42.6%. These countries have not received any of the monetary support but are having to come to terms with the huge decrease in USD purchasing power. There could be a domino effect coming into play, if and when the first country pulls the trigger and makes BTC their legal tender, it could be the start of a much larger play. I will be tracking this story over the coming weeks.

This will also be bullish for metals and especially gold as the safe-haven play. We will be looking to buy into a gold position very soon but I would like to see a small correction on the metal.

AUDUSD 1 Hour Charts

The plan here is to buy dips into the 0.7680 support zone in anticipation of a move higher. The triangle formation can only occur in wave 4 or wave b, therefore this large correction should be moving higher once complete.

Trade Setup: BUY LIMIT – Entry price 0.7680, stop loss 0.7580 and take profit 0.8000.

Stop loss: 100 pips

Take profit: 320 pips