Pre-Requisite Reading: GLD, The Bullish Case for Gold
(article on forexsignalsfactory.net
We are currently positioned short in XAUUSD from 1259.4 level, however this pair did not react the way we would have preferred around 1233.00 level. A strong bearish confirmation would have been the breach of the neckline (red dashed trendline), however that level was apparently rejected and what followed immediately was a strong rally leading XAUUSD to retest the upper trendline of the channel in the daily chart.
We are not ruling out the bearish scenario just yet because the wave count is in favor of the breach of the lower trendline down to 38.2% retracement level. However, with the FED’s interest rate decision, crude oil inventories and pending home sales in focus, we might expect huge volatility to give direction to this pair.
Keep in mind that any position opened in this stage is pure gambling and that you will be subject to the volatility and uncertainty due to the economic data ahead. Our advice for any new positions is to wait until interest rate decision is released and let the market digest that information.
Once the rate decision is out, we will be looking at how price will react at the previous high (ECB-spike), or in case it retests the red neckline. A breach of 1233.00 and close above that level is the signal we need to see if the yellow metal is to make a new low around 1180.00 level.
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