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May 18

GOLD – 18 May 2014

  • In Daily chart, Gold is forming a descending triangle. Moreover, it is ranging between a strong support and resistance zone. It indicates that a break out may happen either in long side or in short side. 18May2014_3
  • In H4 chart, we can see that a head and shoulder pattern is forming. It has a chance to reach near the neckline.18May2014
  • We can also see that price has respected Fibonacci 50% and 38.2% before. If price reaches near 23.6% area, I would like to go for short targeting at least 1277.72 zone. My stop loss will be above the resistance zone of 1305.60. If we take trade around 1294 zone, the risk reward ratio will be 1: 1.6.
  • Disadvantage: If you look closely the H4 chart, we can see that price is reacting very sharply when it touched the support zone. Therefore, buyers are waiting in that zone. Moreover, in daily chart I also showed that break out may happen sooner or later. If it breaks up, we should take the loss gracefully.

18May2014_2

  • Advantage: Long term trend of Gold is downside. Recently, it also made some bullish correction to gain some extra forces to show the bearish momentum again. If it breaks lower, Gold may go at least 1240 area or even further.

1 comment

  1. Chief Trader

    Short direction seems fine. Please set two trades with 25 ounces each:
    1. Short XAUUSD @ 1305 Take Profit 1285 Stop Loss 1317. Justification: with Trend; Support/Resistance.
    2. Short XAUUSD @ 1313 Take Profit 1271 Stop Loss 1332. Justification: with Trend; Support/Resistance.

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