Today I’m going to show you exactly how I’m trading gold within its current range.
We’ll discuss a bullish and bearish scenario for XAUUSD, and which one I favor.
I’ll also share the latest on the US Dollar Index (DXY) so you have that added confidence when trading gold.
Watch the video below and scroll down for the annotated charts and analysis.
Gold has played out nicely since breaking the 2022 trend line in early August.
I discussed the potential for that breakdown beforehand with a target of the $1,890 June low.
From there, I was looking for a bounce toward the $1,940 confluence of resistance, which we just got two weeks ago.
If you saw the last XAUUSD video, you know I was looking for gold shorts from $1,940 based on strength from the US dollar.
The path from gold since early August is something I mentioned to Daily Price Action VIP members over a month ago.
Here’s the projection I shared inside our trading group:
So what’s next for gold?
At the moment, XAUUSD is trading in the middle of the $1,890 to $1,940 range, so new positions are tricky, in my opinion.
My trading edge comes from trading away from strong areas of support or resistance, like the confluence of resistance at $1,940.
But if XAUUSD gives us a sustained break below the $1,890 region in the coming days, I’ll look for fresh shorts toward $1,810.
Of course, the US Dollar Index (DXY) will also come into play, most notably whether the dollar can hold above 104.30.
Remember that gold and the USD tend to share an inverse correlation.
So a continued uptrend for the dollar and a sustained break below $1,890 from gold means I’m only interested in XAUUSD shorts.
On the other hand, if the DXY breaks below 104.30 and gold gets above channel resistance near $1,925, I may entertain XAUUSD longs.
As of now, though, I favor gold shorts, as I have since the $1,940 retest in early September.
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