Pre-Requisite Reading: GLD, The Bullish Case for Gold
On our yesterday’s post regarding a possible short setup on the yellow metal, keeping in mind the long term overview of XAUUSD, we were expecting the upper line of the triangle to be respected. Volatility caused by the ECB press conference helped gold make a new high for the week, however it failed to invalidate our stop loss level (for the short position), at March 11 high.
Another confirmation in favor of the short swing play was the failure of XAUUSD to close above the upper-trendline of the triangle it has formed on the daily chart. In addition, yesterday’s candlestick was a Shooting Star, by far one of the most bearish candlestick patterns when showing up in an uptrend.
What we expect now is a retest of the lower dashed trendline which is also an important level being located near 23.6% retracement. In case that level breaks easily, we should expect our next target 1190.00 to be hit within the next 2 weeks.