Gold, in its 2-hour chart, shows the advance of a five-wave sequence corresponding to a wave (c) of Minuette degree labeled in blue.
On the chart, we observe its fifth internal wave labeled in green in progress, in which the price action may reach a new high, which could be in the range between $1,640 and $1,670 per ounce.
The ascending channel observed in the fifth wave, lead us to conclude that a thrust over the upper-line of the channel would imply the end of the short-term upward cycle.
A short position will activate if the price rises over the upper line of the ascending channel and closes below $1,644.32 per ounce. In our conservative scenario, we anticipate a decline to $1,596.37 per ounce.
If the price action reinforces its bearish momentum, Gold could drop till $1,558.15, and even drop until $1,512.40 per ounce.
The level that invalidates our bearish scenario locates at $1,686.60. Finally, considering that the third wave is extended, if the price starts dropping before the previous high, is it possible that the price turns negative below the $1,640 zone.
Trading Plan Summary
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Entry Level: $1,644,32
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Protective Stop: $1,686.60
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1st Profit Target: $1,596.37
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2nd Profit Target: $1,558.15
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3rd Profit Target: $1,512.40
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
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