Gold – How to Trade
Gold/U.S. Dollar FX:XAUUSD
The price could break the uptrend line and drop below the 1300.00 key level. After bouncing from SMA50 the price moved upward and reached a new resistance zone formed by SMA100, the downtrend line and the uptrend line acting as the resistance. Price action in this zone will be able to give us new trading opportunities and insight for possible market movements. We have two variants which are interesting for us.
If the price breaks the resistance zone and moves above 1308.00 level, it will be a signal confirming a trend reversal with further upward movement. We will be able to use the breakout for opening long positions with stop orders below 1300.00 level. Profit targets will be at the nearest resistance levels.
Alternative variant – if the price bounces from the reversal zone and drops below 1300.00 support, it will give a sell signal with stop orders above 1308.00 and profit targets at the support levels. Such market movement looks more logical as RSI reverses and it is going to start downward movement. MACD lines fall and support the possible downward movement. DMI is bullish , but ADX line falls. It tells us that buyers are not so active.
Anyway we should be ready for any market movements and placing pending orders above and below the key levels will allow joining a price movement in time.
Source: TW DLavrov