Gold Melting at the sight of a possible strong US dollar.
I analysed the Dollar index and for technical reasons, I believe the dollar might strengthen. Looking at Gold ( XAUUSD ) I've concluded the following:
1. Gold finally broke out of its ascending channel with strong bearish momentum. As breakout trader, we know the price moves in two phases (push and exhaustion) *Thanks David* and will nearly always retest a broken support or resistance level . Here we clearly see that price is retesting previous support as new resistance, which indicates that we're likely expectant of a downward move.
2. I enjoy the function of an EMA for confluence. Moving averages operate as dynamic support and resistance and when price plays under the EMA , to me it's as good as looking at it as resistance.
3. Lastly, I'm a huge fan of chart patterns. Price seems to have formed into an ascending wedge in a downtrend which signals bearish continuation as we look to take advantage of the creation of a new lower higher.
1. Gold finally broke out of its ascending channel with strong bearish momentum. As breakout trader, we know the price moves in two phases (push and exhaustion) *Thanks David* and will nearly always retest a broken support or resistance level . Here we clearly see that price is retesting previous support as new resistance, which indicates that we're likely expectant of a downward move.
2. I enjoy the function of an EMA for confluence. Moving averages operate as dynamic support and resistance and when price plays under the EMA , to me it's as good as looking at it as resistance.
3. Lastly, I'm a huge fan of chart patterns. Price seems to have formed into an ascending wedge in a downtrend which signals bearish continuation as we look to take advantage of the creation of a new lower higher.