- The price of gold has moved up to test a key resistance structure.
- A 1:8 R/R trade setup example has been triggered on the move as the last resort for the bears.
Gold prices are testing the bear’s commitments and resilience on failed downside price action.
Gold and DXY technical analysis
A bullish case for the USD has been in the making considering a number of intermarket implications and price analysis:
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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.
The chart above shows that the dollar is not going down without a fight.
If the support holds in the DXY, then this can be beneficial to the following downside analysis on gold and subsequent trade setup:
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The chart above is offering an illustration of how a 1:8 risk to reward trade to the downside can be placed with a stop-loss protecting against a follow through to the upside.
A break of the resistance opens risk back to the upside.
This analysis is a continuation of yesterday’s setup which resulted in a breakeven outcome with the price moving adversely above structure and the target being moved to the entry point to protect capital.
