GOLD has a correlation to the strength of USD, as a risk-off asset investors seek haven in the event of Dollar weakness (USD falls > GOLD rises). I'm sure there's more to it than that, be sure to check it out online for yourself.
Comments
The Daily timeframe is looking very clean when it comes to price action.
Having formed bearish MACD Divergence between 4th January - 20th Feb, we have since seen this break down on the the lower timeframes. What concerns me about shorting this just now though is the Daily 50 EMA which seems to be propping up price at the region of 1300. This is the same region we had a minor rejection on the Weekly timeframe too.
The two red arrows highlight the potential for 2 shoulders, one left and one right, which could be an indication of a bearish Head & Shoulders pattern forming. This adds a lot of confluence to our overall bearish sentiment, and could be the markings of further consolidation which we referred to in the earlier lessons.
A double top on the Daily would be a prime signal for a sell-off cascading up the higher timeframes. This may not happen if we see more selling pressure. Let's see what this next week brings!
Key Note
Head & Shoulders patters can be traded as is or used for overall market sentiment. In their nature, they are consolidation / reversal formations.
Comments
The Daily timeframe is looking very clean when it comes to price action.
Having formed bearish MACD Divergence between 4th January - 20th Feb, we have since seen this break down on the the lower timeframes. What concerns me about shorting this just now though is the Daily 50 EMA which seems to be propping up price at the region of 1300. This is the same region we had a minor rejection on the Weekly timeframe too.
The two red arrows highlight the potential for 2 shoulders, one left and one right, which could be an indication of a bearish Head & Shoulders pattern forming. This adds a lot of confluence to our overall bearish sentiment, and could be the markings of further consolidation which we referred to in the earlier lessons.
A double top on the Daily would be a prime signal for a sell-off cascading up the higher timeframes. This may not happen if we see more selling pressure. Let's see what this next week brings!
Key Note
Head & Shoulders patters can be traded as is or used for overall market sentiment. In their nature, they are consolidation / reversal formations.
