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