Gold rising due DX on Selling sequence

12 sept 2022

Gold's general commentary: Gold is holding it’s ground on the Hourly 4 chart as the Price-action rallies, staying isolated within Daily chart’s #1,725.80 - #1,727.80 Resistance belt but preserving the Bearish Short-term underlying trend. As long as Gold keep #1,731.80 pressure point intact (Fibonacci retracement level and possible Triple Top rejection point), I give more probabilities to the downside even though DX is getting hammered - since Price-action failed to invalidate Support and Lower extension, and (taking all aspects in consideration) will finish the Trading week on gains (sign of Buying sustainability are still not present). The answer can be found in the Selling Intra-day trend on DX (but Bullish Medium-term) taking strong hits and mixed values on Bond Yields (struggling to make Bullish comeback). The Price-action should soon connect with the Hourly 4 chart’s Support fractal near #1,715.80, was a trend setter throughout last couple of sessions and last time it didn’t succeed to hold, Gold extended the downtrend more than #15 points within first #3 Hours of the session. Personally, after weak Bearish E.U. opening today, I still favour going Bearish on the Medium-term, but ideally I would want to see a Lower High’s broken firmly to be more certain (#1,700.80 - #1,692.80 - final line of the defence). On the other hand, Gold stabilized Technical levels and can now proceed with Selling bias after Oversold run.


Technical analysis: Gold continues to Trade above the Daily chart’s Neutral Rectangle (trending sideways), holding tightly the #1,712.80 - #1,715.80 pressure points as an Support cluster (see how it held and rejected the Price-action throughout Friday’s session on the exact same spot). Assuming this pattern continues, then the current market sentiment represent an additional solid Selling opportunity towards the #1,700.80 extension as Inflation sentiment is still on the markets so safe-haven assets such as Gold (not on High demand anymore) shouldn’t benefit, development which should add Selling pressure on Gold and in the same manner add Buying pressure on DX (my strongest correlation at the moment). There is only two Support lines left towards #1,692.80, which is currently Trading on #1,715.80 and #1,700.80 mark configuration. I’ve been highlighting the #1,678.80 potential, and I assume with current market overview, Gold may test it within next week borders as surely it was on the cards if there wasn’t parallel pressure on DX. After the Lower High’s Upper zone extension break, it is anybody’s guess but my estimates show #1,700.80 barrier test on the aftermath. As market closed above the #1,712.80 Support, both sides were equally probable regarding today's session and whole configuration depends on where DX will Trade in the coming sessions.


My position: I have slowly been taking Profits Selling every High which Gold delivers (prices in) and will continue to do so until Price-action breaks and closes the session above #1,731.80 Resistance line. Gold is rising purely due parallel Selling pressure on DX and nothing else. Soon enough, I am expecting Gap fill on DX which may drag the Price-action once again towards #1,715.80 Support first then #1,700.80 extension.