This is J Crawford with a quick, simple trade that I’ll be taking.
Gold has been rallying for a little while now, but over the past few days we have seen some rejection.
The obvious question that comes to mind when a rally is rejected is this:
Is the bullish run over? Or is this a retracement to continue to the upside?
It’s actually an extremely tough question to answer and there are a lot of variables that can go into investigating this situation.
But from a purely technical standpoint, I am a buyer of Gold at 1240.
You can see that the rejection happened a familiar level. This is good news because it shows that XAU is respecting the technical levels within the market which is what we’re attempting to take advantage of.
But note that this is a relatively minor level, especially now that it’s been taken out by recent price. That means that IF gold can build some momentum back up and get going again, it is pretty likely that we’ll see a surge beyond that area.
The next thing to note is where it seems to be slowing down and finding a base right now.
This is a great level. You can see that it has a ton of recent price action around it showing that the market definitely knows where we’re at here. Along with that, we’re at a nice Fibonacci retracement level from this current Bullish swing we have been experiencing.
So, because we have some near-term bullish momentum, a chart that is paying attention to the technicals, a strong area of support, Fibonacci level confluence and a clear target beyond the most recent test; I feel this is a trade worth taking.
My personal plan is a buy at 1240.0 with a stop loss below the 50 Fib level and a target on the blue line you see above.
Hope you like my idea and thanks for reading!