WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Ideas You Can Trade - Gold regains confluence of bearish support

Posted by Steven Hatzakis on Jul 26, 2013 5:18:00 AM

GOLD:  short term momentum regains confluence of mostly bearish support

The daily candle chart shows gold recently recovering (point 1) after breaking below a medium term bearish channel (point 2) and finding support near 1180.00 and then ascending a short term bullish trend line (point 1). The metal then proceeded to break above the resistance line of a steeper shorter term bearish channel (point 3) after regaining the medium term channel (point 2) where it is currently trading near 1330 (as of publication).

Considering that gold has managed to regain 3 support lines albeit 2 of them are medium term bearish ones, this indicates that less bearish momentum may continue as compared with the previous steep bearish momentum (point 5) as was discussed in a previous article in late June 2013.

If the current support line (point 1) can support the very short term bullish momentum, then gold may re-target the previous short term bullish support line (point 4) which could act as resistance.

However, if the current steep bullish trend line (point 1) fails, then gold may retest the bottom of the medium term bearish channel (point 2) or the upper line of the steep bearish channel (point 3) over the short term. Two additional charts are provided for very long term and short term perspectives.

 Below are examples of how to trade a bullish continuation or a bearish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @1349.00 with a Limit to take profit @ 1382.00 and a stop-loss to cut losses @ 1318.00 Risk/Reward Summary: Limit risk = +33 points profit / (-31) points Stop-loss risk = Gain to Loss ratio = 1.06

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1307.00, with a Limit to take profit @ 1271.00 and a stop-loss to cut losses @ 1333.00 Risk/Reward Summary:   Limit risk = +36 point profit / (-26) Stop-loss risk = Gain to Loss Ratio = 1.38

 Daily candle chart:

describe the image

4 hour candle chart:

describe the image

weekly candle chart:

gold weekly july 26 2013 note



Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

Browse our frequently asked questions and find your answers right away.

Access to the educational lessons, webinars and platform walkthroughs.


Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!