TECHNICAL NARRATIVE:
Currently, we have seen what seems to be a complete Sell Program on the 30m timeframe, with a Smart Money Reversal (SMR) at the 4351 area, confirmed by a lower AVWAP (weekly) rejection. The sell program followed a clean 5-part grading.
With confirmation of a reversal and the initiation of a buy program, a low-risk buy entry was not available and instead I have entered on the retracement to the SMR distribution. The reason for this entry is a strong close above the weekly POC and a rejection of the weekly centre AVWAP line (blue line). An entry is still possible on the VWAP or original entry if price retraces slightly.
Targets:
– 4479: Local Resistance Level
– 4558: High Volume Node (HVN)
Stoploss:
– 4403: Right below POC and below VWAP
I will continue to monitor this set up and will be looking out for the next grading structures, such as the formation of strong breakaway gaps and any further accumulation/consolidations. Generally, price is still presenting choppy action and consolidations should be taken as key areas.
If this trade idea plays out, we could be looking at the next SMR area at 4622-4636.
FUNDAMENTAL NARRATIVE:
From an intraday perspective, DXY strength is still soft and continuing in a slight bearish trend, supporting a move up for Gold.
Oil is now showing signs of cooling off due to the slight de-escalation of US-Iran tensions, which means inflation expectations will fall.
The move is also supported by cooling nominal (treasury) US yields, which support an upside move for Gold.
Overall, lower real yields means a smaller opportunity cost of holding gold, hence we can expect gold to rally.
NOTES:
This is first publish for Gold, and my experience is less than a year. It is prone to mistakes. If you choose to follow this analysis, please use it with caution or, more of a confirmation for your own ideas!
Support is appreciated for further idea publishes.