Gold Technical Analysis, July 21, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts

Gold:


Technical Outlook:

Gold is testing its recent highs at $1820 mark at this point in writing and is expected to face resistance again. The long term structure still constructs a bearish picture but the yellow metal needs to break below $1790 support to confirm a meaningful top is in place.

Gold’s larger degree wave structure continues to remain bearish against $1920 highs in 2011. Please note that the yellow metal had dropped from $1920 through $1046 highs, sub-dividing into 5 waves. The impulse drop had confirmed that there is still further room left.

A 5 wave movement in a particular direction confirms that the move is incomplete. We need to see yet another 5 wave movement towards the same direction, after a corrective wave. Hence, structurally Gold should print below $1046 to complete the corrective phase.

The wave structure is as follows: Gold had earlier dropped between $1920 through $1046, sub-dividing into 5 waves, labelled as Wave (A) on the weekly chart. Ideally, an impulse is followed by a corrective wave, which can be seen as A, B, C on the chart.

The corrective wave has also reached its fibonacci 1.618 extension around $1799 as seen here. Gold has further extended its rally towards $1820 levels. The yellow metal should produce a bearish reversal from current levels soon and break below $1790.

Once the above structure unfolds, we can confirm with certainty that Wave (B) is complete around $1820 levels and that Gold is now heading lower towards $1046 levels, as Wave (C) progresses further.


Trading Strategy:

Remain flat for now and allow a break below $1790.


Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

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