Today I’m going to show you exactly how I’m trading XAUUSD.
I’ll discuss the current range for gold, and the key levels that will trigger a breakout in the coming days.
I’ll also share targets for that breakout and how the US Dollar Index (DXY) can help confirm the next big move from gold.
Check out the XAUUSD video below and scroll down for the annotated charts and analysis.
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XAUUSD is pulling back today after nearly testing the $1,940 resistance area on Wednesday.
While gold remains range bound, the upcoming break, either below $1,900 or above $1,940, could offer a favorable opportunity.
If you saw last week’s XAUUSD video, you know why $1,900 is significant.
This week, we saw a decent bounce from that area, offering traders an opportunity to profit on longs from that region.
However, the sideways action from XAUUSD makes trading the pair difficult.
That said, a break above $1,940 or below $1,900 in the coming days should offer a much more favorable opportunity.
Here’s my plan:
Bullish Scenario for XAUUSD
The bullish trigger for XAUUSD is a sustained break above $1,940, with the DXY breaking below 102.00.
That would expose the $1,980 level and potentially $2,070.
Bearish Scenario for XAUUSD
The bearish trigger for XAUUSD is a sustained break below $1,895, with the DXY breaking above the 103.50 yearly open.
That would expose the $1,800 key support area.
I’m standing aside for now until the pair follows through on one of the two scenarios above.
Be sure to watch the video above to learn why the DXY matters when trading XAUUSD and how to use the dollar index to confirm or negate gold setups.
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