Today I’m going to share exactly how I’m trading gold following yesterday’s post-FOMC rally.
We’ll discuss a reclaim that could target the December 4th wick, as well as a must-hold level for gold bulls.
Watch the video below and scroll down for the annotated charts and analysis.
Gold (XAUUSD) carved a new all-time high on December 4th before an aggressive 8% pullback.
That selloff left an imbalance that could get filled in the coming days.
Long upper and lower wicks tend to fill, as the aggressive selling or buying pressure respectively leaves an imbalance.
We can say the same for large bullish or bearish candles, especially those that occur on the higher time frames.
These areas often serve as magnets for price.
Specifically, I’m eyeing the 50% retracement of the December 4th upper wick at $2,118.
Not so coincidentally, that’s also the highest hourly close for XAUUSD.
Wednesday’s post-FOMC reclaim of $2,008 leaves gold looking relatively bullish.
However, the key to today’s idea lies at $2,050.
That’s the previous highest daily close for XAUUSD and the bottom of the October channel that broke down earlier this month.
So $2,050 is resistance as of this writing.
That’s a critical point because any gold longs at current levels are buying into resistance.
The key component for XAUUSD to target $2,118 and potentially higher will be a sustained break back above $2,050.
If gold can’t do it and instead falls back below $2,008, I will look lower toward $1,930.
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