If we see some type of exhaustion candle, then I am not going to hesitate whatsoever to start shorting.
- Gold markets have rallied again during the trading session on Friday, as we have broken above the 200-Day EMA.
- That being said, the market is likely to continue seeing buyers in this situation, due to the fact that the markets now believe that is only a matter of time before the Federal Reserve pivots.
- Granted, there’s almost no chance of them doing that so it’s going to be difficult to hang onto this rally.
If we see some type of exhaustion candle, then I am not going to hesitate whatsoever to start shorting. I think at this point in time the market has gotten overdone so at the very least we need to start thinking about the possibility of a pullback. After a pullback, then we could continue going higher, assuming that interest rates continue to drop. I don’t necessarily believe that’s going to be the case for the longer term, but you should also keep in mind that markets will do whatever they want to do, despite the fact that the Federal Reserve is trying to convince them otherwise.
Dollar Likely to Suffer in the Short Term
Now that we are above the 200-Day EMA, you could make an argument that gold is going to the $1800 level, which of course is an area where we had seen a lot of resistance previously. On the other hand, if we were to break down below the bottom of the candlestick, we kick off the pullback that I had talked about. The $1680 level underneath could be an area of support as it was once been resistance. This has been a very strong move, but it is still a little ways to go before we could get going higher.
It’s probably worth noting that the candlestick during the trading session on Friday was a lot smaller than the one on Thursday, so you have to question whether or not momentum is running out. Nonetheless, it is also worth noting that we closed out the week at the very top of the range, so that of course is a very bullish sign for the market. It looks as if the US dollar is going to continue to suffer in the short term, so that might be the main takeaway. The market also recently formed a bit of a triple bottom, down at the $1620 level.
Ready to trade our Gold trading prediction? We’ve made a list of the best Gold trading platforms worth trading with.