Good afternoon, dear traders. Starting today we include the technical analysis for precious metals CFDs in IFC Markets regular analytical releases. Today we consider the XAUUSD instrument on the H4 chart.
As we can see, the price broke the daily downtrend resistance line and had the backside return. This graphic pattern is called a correct bullish reversal. In most cases the graphic model anticipates a new upward momentum. In accordance with that the crossed critical resistance level acts as the support. Presently gold is traded about $1320.46 per ounce, which allows aggressive traders to make a potentially profitable purchase. If the price continues to grow on the most likely scenario into the green zone, it will be reasonable to place the pending buy order above $1333.59. Passing this critical level ensures the ParabolicSAR reversal and overcoming the PivotPoints first resistance.
On the other hand, there is always some probability that the trend line breach proves to be false, and the price returns to the bearish mood. The RSI-Bars signal is still drifting in the range. Only after the H4 trend line and daily line downward crossing the confidence in the reversal will be confirmed. At the same time the Pivot channel crossing into the red zone is expected. It is recommended a sell order to be opened below the Parabolic historical values at 1313.72.
After two pending orders opening, we expect the first of them to be executed and the opposite position to be closed. In this case the opposite channel level acts as the risk limitation level. The Dynamic Trailing Stop is to be moved after the Parabolic values every 4 hours (trend following strategy), changing the probable profit/loss ratio in your favor.
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|Buy stop||above 1333.59|
|Stop loss||below 1313.72|
|Sell Stop||below 1313.72|
|Stop loss (Sell)||above 1333.59|
Market Analysis provided by IFCMarkets