Gold: Wait for Reversal and New Buy Opportunities
Gold/U.S. Dollar FX:XAUUSD
The price reached the support zone between 1460.00 and 1450.00 support levels, and it means that we should be ready to buy. The market looks oversold, and RSI confirms it. Selling in the current market conditions is not a good idea. The market moved downward a lot, and it will be logically searching for buy opportunities based on reversal and breakout signals.
For getting a better entry-level, we should wait for a price reversal from the support levels. The 1st bullish candle will confirm that the price bounces from the support. It will be possible to buy based on the high price of the signal candle. Such type of trading will allow us to catch a better entry price, but the trade will be risky if compare it with another type of trading.
If you want to get additional signals confirming the price reversal, the further upward movement, and the strength of buyers, it will be better to use breakout signals above the local swing high and the downtrend line. With such an approach, we won’t get the best entry price, but we will get more reliable buy signals.
The market does not provide us the exact trading signals right now, but the market should be added to your watchlist. During the next week, we will be able to trade following a new upward movement.
Source: TW DLavrov