Let’s look at the almighty safe haven Gold. The precious metal is currently trading at 1610.50 at the time of writing the article. After seeing the massive selloff in gold as investors hurried to get cash on hand in fear of a recession and massive crash in the stock market , we saw the safe haven status come back to life with gold picking up steam off of 1450.00 and rallying towards a high of 1645.00.
Since then we’ve seen a slowdown with price stabilising above the key level of 1600.00. Looking closely at the price action, we can see a higher high and higher low formation. The psychological level of 1600.00 will be a vital support level for gold to continue its rush into 1700.00 and an extended target of 1774.00. Should price break 1600.00 we can see a descent into the support level of 1563.00.
Looking at the 1 hour timeframe, we can see the higher high, which we have also used as point 1 of our descending trend line. Price is currently forming a descending channel, as we trickle towards 1600.00. We also have an ascending trend line which has broken, retested and continued to the downside. 1600.00 would prove to be a pivotal point due to the fact that if price should break that level, we will break structure forming a lower low.
Looking at the 15 minute timeframe, the descending channel is more clear as well as we can see a break of support. As we make our way to the US session, we will be looking for a reversal/slowdown in & around 1600-1604.00 however, should price break and close below 1600.00 the long setup will be invalid and we will await further price action.
Looking at the fundamentals, we have major news for the US Dollar, so we could see a major flight into safe havens with consumer confidence, manufacturing PMI’s , crude oil inventories, jobless claims, the trade balance, AND NFP ! There is a boatload of fundamentals this week traders so trade safe and and remain patient for your setup in the markets.
