On Friday, the USD closed on a high and clawing back on some loses it had made in the previous trading days. Of importance is the relationship between a strong USD and the impact is has on the bullion. The stronger or prospects of a stronger US economy means the general commodity market will take a beating and this by the way is the resumption of that commodity market meltdown unless of course something drastic happens.
In the monthly chart, the USD gained for 3 consecutive months starting from October till December when there was a minor reprieve but then again prices of Gold will continue to slump and be in sync with Gold mining stock companies which are on a bear run. Looking at the chart the bear run is strong and when today’s market opened, the daily chart stochastics was overbought with Friday’s candle closing as a bear and thereby forming a double bar reversal pattern with the upper BB acting as a ceiling.
My strategy for this pair today is to short now and place my stops above Thursday’s high-that will be at $1186.0/Ounce and ride it low with a trailing stop of 50.0 points. My first take profit target will be at Last month’s lows of $1125/Ounce then next stop at $1045/ounce which is a zone of support in the weekly chart.
Let me know what your opinion is for this pair in the comment section.
Thanks and a have a good trading day.