Gold Again Approaching $2,000 And Could Strike New All Time Highs
Gold broke all time highs in July 2020 for the first time in nine years, piercing through $1,920 with ease and now supporting above this major level.
The Trade: Gold compressing into a possible wedge breakout pattern.
- Wedge forming above the previous all time high.
- Respected the 200 EMA on four occasions in the past two weeks, reclaiming and held above on Fridays close.
- Price has also reclaimed 50 EMA and $1,950 level.
- A test back to the 200 EMA completes the ABCDE 5 wave wedge providing a lower risk entry into an accumulation zone between the 200 EMA and $1,950.
- The all time high is well in the spot light as a target if $2,015 breaks and holds.
- US dollar pressure continues to fall
- FED Chairman Powell dovish has suggested longer periods of lower interest rates
- FED balance sheet sitting at $7 Trillion US
Support: $1,920, $1,950
Resistance: $1,980, $2,015, $2,050, $2,073
The lower band of the wedge also coincides with the 200 EMA and key level $1,920. If this level is breached and holds below, the long position should be closed until further signals suggest to re-enter.
IF: Price breaks above $1,980, hits $2,015 but fails and sells off strongly, it may be wise to move stops to break even as this pattern could also form the Elliott Wave ZigZag C Wave.
Remember as a trader it is your job to mitigate the risk, and only trade structures that provide high probability and great reward to risk ratios.
An entry just above $1,950 with a target at all time high $2,073 provides a 2.6x reward to risk to target 1
3x reward to risk to target 2 $2,100
3.5x reward to risk to target 3 $2,120
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