Across the board, we saw the US dollar plummet against the majority of its trading peers on Thursday. This provided an already upbeat gold market a boost, pulling the yellow metal to highs of 1323.9 and positioning the H4 candles within striking distance of a H4 AB=CD completion area (127.2%: 1331.6/1325.4).
Now, going by the structure presented on the weekly timeframe, there’s not a whole lot stopping the piece extending recent gains up to as far north as the weekly resistance level coming in at 1337.3. Contrary to this, however, daily action is faced with a supply zone plotted at 1334.3-1323.3.
Market direction:
The question then, as we see it, is, are you willing to sell the H4 AB=CD formation knowing that it is backed by a daily supply zone, but against potential weekly flow?
Under such situations as these, we generally see two options. The first is to simply pass on the setup. The second is instead of placing pending sell order at the H4 AB=CD sell zone, wait for H4 price to connect and prove seller intent. What we mean by seller intent is simply a full or near-full-bodied H4 bearish candle. Of course, this will not guarantee a winning trade, but what it will do is give one an indication as to who’s active.
Areas worthy of attention:
Supports: …
Resistances: 1337.3; 1334.3-1323.3: 1331.6/1325.4.
Now, going by the structure presented on the weekly timeframe, there’s not a whole lot stopping the piece extending recent gains up to as far north as the weekly resistance level coming in at 1337.3. Contrary to this, however, daily action is faced with a supply zone plotted at 1334.3-1323.3.
Market direction:
The question then, as we see it, is, are you willing to sell the H4 AB=CD formation knowing that it is backed by a daily supply zone, but against potential weekly flow?
Under such situations as these, we generally see two options. The first is to simply pass on the setup. The second is instead of placing pending sell order at the H4 AB=CD sell zone, wait for H4 price to connect and prove seller intent. What we mean by seller intent is simply a full or near-full-bodied H4 bearish candle. Of course, this will not guarantee a winning trade, but what it will do is give one an indication as to who’s active.
Areas worthy of attention:
Supports: …
Resistances: 1337.3; 1334.3-1323.3: 1331.6/1325.4.
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