Gold: Nearing Fresh Session Lows as Bullish Support Line Failed Following the Bounce from Last Week
The daily candle chart below shows the price history of Gold over the medium term. This Contract for Difference (CFD) aims to track the underlying spot price of the precious metal Gold, and is trading near 1214.78 around time of publication and making fresh lows in today's session. (then during publication dropped towards 1211.65.)
Earlier this month, last time in Ideas You Can Trade Gold was described as having room to go lower as a bullish support line was within reach of the then-bearish momentum.
Last week that support line was reach and Gold has since bounced higher, but despite trading higher in the last 4 trading days the bullish line was again tested today and was just breached and is falling.
The medium term support line of the bearish channel is near 1164.00 - and is a downside target in the very short term - if steep bearish momentum returns, whereas the above mentioned bullish support line must be regained for Gold to avoid going back into its prior bearish trajectory.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1223.00 with a Limit to take profit @ 1249.00 and a stop-loss @ 1201.00 Risk/Reward Summary: Limit risk = 26.00 Profit / (-22.00) stop-loss risk = Gain to Loss ratio = 1.18
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1208.00 with a Limit to take profit @ 1188.00 and a stop-loss @ 1228.00 Risk/Reward Summary: Limit risk = profit 20.00/ (-20.00) Stop-loss risk = Gain to Loss Ratio = 1.00
Medium Term Daily Candle Chart: