Gold always delivers #3 consecutive declines before a rebound

13 ก.ค. 2022

Gold's general commentary: Eventually the Hourly 4 chart’s Descending Channel should be formed and deliver strong impulse below #1,700.80 psychological barrier towards #1,678.80 Lower Low's extension which may be final Selling extension and stabilization zone regarding the Short-term. Hourly 4 chart's Resistance zone is now priced at #1,752.80 - #1,755.80 and should work as the Resistance zone in order to complete the Bearish sequence which is calling for a #3rd Selling extension around the #1,678.80. Even though the Lower zone of Higher Low's was at #1,756.80 breaking of mentioned configuration would invalidate the Technical Selling potential, as the Short-term Bearish trend would not resume and will come to an exhaustion (at least for current week) but with DX above local peak, that outlook has small chances to develop. In my opinion, if the #1,756.80 Resistance breaks, Gold should spike towards #1,785.80, and break of can test #1,800.80 variance and above (similar sequence as January #21 - January #29 Double Top zone). However, Bullish bias is strongly limited.


Technical analysis: Gold is approaching #1,720.80 - #1,722.80 Lower Low’s Upper zone extension which seasonally rejected any downside attempt since April #13, #2021 Year with the #1,700.80 psychological barrier representing my main point of interest. Hourly 4 chart has been on Lower Low’s Upper zone since last week’s values and a breakout on theses levels forms a steep Descending Channel. DX touched #108.400 again, forming a very Bearish Fundamental outlook for Gold which is not Gold friendly to a huge extent. Keep in mind that on a Weekly basis (#1W), Gold is still on #4 consecutive Bearish weeks in general and there is still time even for the current Monthly candle to close in losses. With this week's Macroeconomic news releases standing out as potential catalysts, I expect Gold to start devalue its Inflated prices even more due to current fractal’s DX numbers which is Trading on huge gains as Euro touches Lowest level since November #2002. Year of #1.0053. It is important to note that Gold (as a cycle) always delivers #3 consecutive declines before rebounding, and final one is yet expected.


Fundamental analysis: Keep in mind that as more as Inflation is rising and world economy is sinking into a recession, DX will benefit (and Gold will lose). Regarding current structure, it is well known fact which I discovered that market speculators prevent the oscillation manually in some cases, hitting the local High’s which are instantly Sold to remove big portion of retail Traders from the market and only then Price a major move. Therefore, I will keep my piercing Selling order (as long as variance allows) which is Targeting #1,700.80 psychological barrier. I am making excellent Profits Selling every Top that Gold makes towards #1,722.80 Support, keeping my original order intact towards #1,700.80 barrier. Gold is about to form Dead Cat bounce on Hourly 4 chart which is going strongly in Sellers favour.


Since many Traders made an inquiry regarding Dead Cat bounce explanation: Technically speaking, a Dead Cat bounce can only be identified after it happens. The "bounce" is the Short-term price increase that is preceded and followed by decline. The second decline brings the Price to new Low's. Until the second decline occurs, there's no way to know whether a Price increase is a Dead Cat bounce or the beginning of an actual sustained recovery of the asset's value.


My position: As stated above, I am making excellent Profits Selling every Top that Gold delivers towards #1,722.80 which were instantly Bought back, while I do keep my original Selling order towards #1,700.80 barrier. I expect further Trading to be performed below #1,700.80 barrier within #2 sessions, towards #1,678.80 Lower Low's extension which should represent stabilization zone for current Selling sequence.