Today game plan will be simple, look to short at all highs in the 15 min chart. As usual, the confirming indicator for this short recommendation will have to be confirmed with an overbought stochastics in the 15 min chart happening in a resistance zone marked on the chart. These short term or intraday levels of resistance will be at $1214.50/Ounce and $1220/Ounce and they will be our sell limit and stop loss levels respectively.
If prices continue to trend higher and stop loss is hit, look to initiate shorts in the 4HR chart at $1230 with your stop loss at $1250. Irrespective of the time frame of entry, a risk reward ratio of 1:3 should be the standard. Technicals are indicating further price erosion both in the weekly and monthly chart and even though the daily chart is overbought with horizontal consolidation panning out in the last few days, the $1230-$1250 remains an area of strong resistance and any strong break above that level will definitely invalidate our projections.
Not too much fundamentals today other than the Fed minutes at 1800GMT, Unemployment claims at 1330 GMT and Crude Oil inventories at the usual time of 1500 GMT. There is a Bollinger squeeze which started on Monday visible in the 4HR chart and chances are there will be a break below, fundamentals will hasten this break below or above depending on if it beats expectations or falls below it. So watch today’s data release carefully.
For today, trade as follows:
Sell Limit: 1215
Stop Loss: 1220
Take Profit: 1:3 risk reward ratio
Trade 2 if price moves up and SL is triggered:
Sell Limit: 1230
Stop Loss: 1250
Take Profit: Take Profit: 1:3 risk reward ratio
Have a good trading day.