Gold Analysis Week Beginning 6th November 2016
You may remember my tweet of the 18th October (below) where I said Gold had a lot further upside to go. Well we are now 45 points higher on the yellow metal and I still think it has further to go.
With the US elections this week and the possibility of further uncertainty, the safe haven metal is consolidating underneath supply and a price pivot area.
When we don’t get a fast rejection from a zone and it just hangs there for too long, the possibility of a break upwards through the zone becomes more likely.
So I have 2 scenarios on my 4 hour chart below. Either 1) the market will continue to consolidate underneath the zone and eventually break up or 2) the market will retrace back to a demand zone and then attempt to break.
Whatever happens, those untested swing highs which will have stoplosses above, are looking very tempting. Eventually the market won’t be able to resist gunning those stops to find liquidity.
We can see exactly the same stoploss pattern on a GBP/USD 15 min chart that I tweeted 3 weeks ago…
… and this is what happened during the period leading up to the High Court decision. As this is a 1 hour chart, the diagonal line from the chart above has shifted to the left. The red horizontal line indicates the very last stoploss/swing high from the previous chart.
As predicted, all stops were taken out and once again price action has shown the market’s expectation of future news.
These past and future predictions use my own style of supply and demand and price action trading. There is nothing complicated about it, once you know how to do it! The rest comes down to experience 😉
If you enjoyed this article, please use the social media buttons to share with your trading buddies.