Gold Technical Analysis, September 22, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts


Technical Outlook:

Gold might be preparing to break out of the trading range that it has formed since last several trading sessions. A break below $1862 would certainly confirm that the trend has reversed. Overall, bears are looking to remain in control until prices stay below $2075 resistance.

Gold seems to be in a larger degree corrective wave, a probable expanded flat structure, spanning since last several years. The structure might have begun in 2011 after printing highs around $1920 levels. Wave (A) could be defined as the drop between $1920 and $1046 respectively.

The metal broke out of the sideways consolidation finally in May 2019 after printing lows at $1262 mark. It rallied through $2075 highs, potential Wave (B) termination. If the above proposed structure holds well, Gold should remain below $2075 and turn lower.

If the larger degree Wave (C) has resumed, prices would stay below $2075 and eventually break below $1862 interim support. Pullback rallies remain possible but they should remain well capped below $2075 highs, going forward.

Looking at the lower degree wave counts, Gold might be carving a Wave 2 corrective rally and it could push through $2000 levels from here, before finding resistance again. Also note that fibonacci 0.618 retracement of the recent drop between $2075 and $1862 is seen around $2015.

Overall, Gold remains in control of bears after hitting all-time highs around $2075 levels. The yellow metal remains a good case to be sold on rallies from here. Watch out for a counter trend rally materializing towards $2000 mark before reversing.

Trading Strategy:

Short against $2075, target is open.

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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