Gold Price Analysis: XAU/USD bears taking over below structure for 1:3 R/R prospects

The price of gold could have played into the hands of the bears seeking a discount.
A 1:3 R/R 4-hour bearish swing trade was activated on the bid.

Ross J Burland FXStreet

Gold prices rallied on dollar weakness following mixed messages pertaining to the US President Donald Trump's tweets about fiscal stimulus.

Gold and DXY technical analysis

DXY Price Analysis: EM-FX/DXY could be a tell-tale sign of things to come

A bullish case for the USD has been in the making considering a number of intermarket implications and price analysis for which may be starting to come to fruition:

DXY stationary on FOMC minutes, needs to hold above 93.40

As for gold, in previous analysis, it was stressed the dollar was in the driver's seat and to monitor for a 5th wave to the upside:

Gold gives a discount to the committed bears

It was explained that a break below the 4-hour support will open the potential for a short.

Following the events of both US sessions since yesterday's analysis:

Gold Price Analysis: Bears back in the driver's seat, 1:3 R/R setup in place

... the price has indeed risen back to test the entry point as it was expected to do so, as illustrated here:

Outcome:

As shown in the daily and the below 4-hour charts, the price has followed the above analysis to a T.

The sell limit was strategically placed at the structure for a discount with a stop loss protecting the position above the highs.

The target was established just ahead of lower structure for a 1:3 risk to reward.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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