Hey Traders, we have a possible trend reversal setting up on the 4 hour timeframe. We had an impulse move to the downside and price has consolidated creating a Bearish Flag Pattern. As some of you may know, a flag pattern is typically a trend continuation pattern however Gold is technically still in an uptrend according to my rules for identifying a reversal. One more lower high would be my confirmation for a trend reversal. If you would like to know what I consider a trend reversal please check out my "How to read structure (charts) tutorial. Charts 1-5" to learn more. I am still long on Gold right now as I stated In my a recent idea
"todays interest rate decision & how it will affect gold". I will remain long until I am stopped out of that trade however if gold does create another lower high on the 4 hour timeframe, I will begin to look for short opportunities. Right now I think the best move is to remain flat or in your existing positions until price gives us more info. Even though gold has had a minor pullback, I still believe higher interest rates are bullish for the metals in this environment & given the recent bad economic data, Investors may start hedging there bets here and we all know gold is one of the best ways to hedge! I would like to see more strength out of gold moving forward as I do not like slow movement to the high side followed by fast selloffs. Slow movement to the high side and fast movement to the downside tells me that the buyers are somewhat indecisive & unsure while the sellers are decisive and sure. This could prove to be cause for a further pullback but we must trade our plans and wait for more price action as gold could really go either way at this point. I think the metals may continue to pullback here but so long as we do not violate the "crucial low" shown on the chart below, Price will remain in a daily uptrend.
In Summary:
-Price is currently in a Daily uptrend.
-Price is currently in a uptrend on the 4 hour timeframe.
-One more lower high would confirm a trend reversal on the 4 hour timeframe according to my rules for identifying trend reversals. This would most likely be a good opportunity to look for shorts.
-Daily uptrend will remain in tact so long as the crucial low shown on the chart below is not violated.
-I am still long until I am stopped out.
Targets for the Flag pattern would put price right on a long term trend line. I hope this was helpful & I plan on updating this idea after we see some more price action occur.
"todays interest rate decision & how it will affect gold". I will remain long until I am stopped out of that trade however if gold does create another lower high on the 4 hour timeframe, I will begin to look for short opportunities. Right now I think the best move is to remain flat or in your existing positions until price gives us more info. Even though gold has had a minor pullback, I still believe higher interest rates are bullish for the metals in this environment & given the recent bad economic data, Investors may start hedging there bets here and we all know gold is one of the best ways to hedge! I would like to see more strength out of gold moving forward as I do not like slow movement to the high side followed by fast selloffs. Slow movement to the high side and fast movement to the downside tells me that the buyers are somewhat indecisive & unsure while the sellers are decisive and sure. This could prove to be cause for a further pullback but we must trade our plans and wait for more price action as gold could really go either way at this point. I think the metals may continue to pullback here but so long as we do not violate the "crucial low" shown on the chart below, Price will remain in a daily uptrend.
In Summary:
-Price is currently in a Daily uptrend.
-Price is currently in a uptrend on the 4 hour timeframe.
-One more lower high would confirm a trend reversal on the 4 hour timeframe according to my rules for identifying trend reversals. This would most likely be a good opportunity to look for shorts.
-Daily uptrend will remain in tact so long as the crucial low shown on the chart below is not violated.
-I am still long until I am stopped out.
