Namaste to all #hive and #inleo community members. 🙏
After struggling a lot to make new highs the bulls finally lost their dominance and the bears brought the #gold prices down to their lowest level in the last 3 weeks. And I am very proud of my analysis because in last week's analysis, I told you that, the absence of any follow-up buying after the breakout candle tells how unsure the bulls are. But still, I do not consider this sell-off of the last week as a sign of any major weakness unless the price breaks below 1944. But there is no doubt that currently, the sellers have the dominance.
Click here to go through my previous analysis.
Image by Freepik | Edited on Canva.
Important points we talked about in our previous analysis are:
- Recently we did see a breakout of the previous swing high. But the absence of any follow-up activity after the breakout candle shows how indecisive the bulls are.
- After which the high of recent price action, which is roughly at the level of 2010 would be our first important resistance. And following the recent price action, it would be better to wait for the follow-up movement instead of taking trades on breakouts.
- Immediate important support would be the level of 1975 and 1955.
Chart Image by Trading View | XAU/USD chart 4-hour time frame.
Now if you look at the price movement of the last 1 week which is on the right side of the vertical blue line marked on the chart above, you will see that gold prices have also formed a nice lower-low structure after breaking both of our support levels, one of which is shown as a thick white horizontal line and the other as a thick yellow horizontal line. This is why I said there is no doubt that currently, the sellers have the dominance.
Let's now take another dive into the #xau / #usd (GOLD) chart, and see where it could be headed in the coming days.
Now in the above chart, you can see a finger symbol pointing upwards. This basically points to the previous swing low which is near the 1944 level. This is the third support level that we talked about in the previous analysis blog. And yesterday it was from this point that the Bulls started putting pressure on the Bears, and they are still holding it. You can see that!
Now, I will wait for the price to go above 1975 to place a buy order. It would be better to sit back and monitor the price action as long as the price is between 1944 and 1975. This would be a no-trading zone for me. Because 1975 is the level below which we saw bears becoming more active and in yesterday's price action, the bulls started putting pressure on the bears from around the 1944 level.
As earlier I said, this selloff could also be a preparation for a bigger up-move. Because even a healthy trend needs to be followed by some profit booking to remain healthy. But it is also true that in the last few days, we have seen bears dominating the bull. But the bulls bounce back from a key support in tomorrow's price action. Therefore, it becomes even more important to confirm the direction of the trend before making any kind of trade. For which I have suggested some levels above based on my understanding and analysis.
PS: The above analysis is only for learning purposes and not a financial advice. Please do your own #research before #investing your hard-earned money.
I will say it again, Instead of thinking like a Buyer or a Seller, we have to think like an Opportunist. No matter which direction the price moves, we have to confirm the follow-up movement before placing any order.
Posted Using InLeo Alpha
