So, the strong support zone that I shared yesterday worked exactly as expected, and Gold delivered a solid upside move from that area.
Yesterday's sharp decline created a lot of fear in the market. During the closing session, when Gold rejected from around $4092, many traders assumed it was just a retracement before another bearish continuation. As a result, a large number of sellers entered the market expecting further downside.
However, as I clearly mentioned yesterday, I believed this was nothing more than a trap. My overall bias remained bullish, and I planned to continue looking for buying opportunities.
At this point, the sellers who entered near yesterday's close are already under pressure. The interesting part is that Gold still hasn't managed to close above the important $4100 psychological level. This makes the current market structure even more attractive from a psychological perspective.
After the rejection from $4092, there's no doubt that the majority of retail sellers placed their stop losses just above $4100. Since the market has once again rejected from almost the same round-number area, even more sellers have likely entered fresh short positions with their stop losses sitting above $4100.
I believe the market may invite a few more sellers before making its real move. By the end of the day, I expect Gold to turn bullish, break above $4100, and extend toward the $4118-$4124 resistance zone.
Around $4118-$4124, we could see some temporary consolidation. However, once that range breaks, I expect a strong bullish expansion that pushes Gold higher and eventually closes above Wednesday's high.
So, this is my simple trading plan for Thursday.
Overall, I prefer looking for buying opportunities because this week the market has been forming a higher low structure, which suggests that buyers are gradually gaining control. At the same time, the recent sharp decline has attracted a large number of random sellers into the market, and I believe trapping those sellers is necessary before Gold can continue its next bullish leg.
I hope you enjoyed this psychological market analysis and that it helps you prepare for today's trading session.
Now I'd love to hear your opinion.
What is your view on Gold for Thursday? Let me know in the comments!
Yesterday's sharp decline created a lot of fear in the market. During the closing session, when Gold rejected from around $4092, many traders assumed it was just a retracement before another bearish continuation. As a result, a large number of sellers entered the market expecting further downside.
However, as I clearly mentioned yesterday, I believed this was nothing more than a trap. My overall bias remained bullish, and I planned to continue looking for buying opportunities.
At this point, the sellers who entered near yesterday's close are already under pressure. The interesting part is that Gold still hasn't managed to close above the important $4100 psychological level. This makes the current market structure even more attractive from a psychological perspective.
After the rejection from $4092, there's no doubt that the majority of retail sellers placed their stop losses just above $4100. Since the market has once again rejected from almost the same round-number area, even more sellers have likely entered fresh short positions with their stop losses sitting above $4100.
I believe the market may invite a few more sellers before making its real move. By the end of the day, I expect Gold to turn bullish, break above $4100, and extend toward the $4118-$4124 resistance zone.
Around $4118-$4124, we could see some temporary consolidation. However, once that range breaks, I expect a strong bullish expansion that pushes Gold higher and eventually closes above Wednesday's high.
So, this is my simple trading plan for Thursday.
Overall, I prefer looking for buying opportunities because this week the market has been forming a higher low structure, which suggests that buyers are gradually gaining control. At the same time, the recent sharp decline has attracted a large number of random sellers into the market, and I believe trapping those sellers is necessary before Gold can continue its next bullish leg.
I hope you enjoyed this psychological market analysis and that it helps you prepare for today's trading session.
Now I'd love to hear your opinion.
What is your view on Gold for Thursday? Let me know in the comments!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.