Gold’s Correction Phase: Key Levels and What to Watch Next
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In yesterday’s post, I discussed the possibility of a new leg in the ongoing correction for gold, pinpointing the 2630 zone as a potential area for this decline to materialize.
As it stands, XAU/USD has indeed dropped to that level and is currently showing signs of recovery.
However, there are two key takeaways from yesterday’s price action that need to be highlighted:
1. The correction fits within the broader bullish trend: Despite the pullback, it is essential to recognize that the movement appears corrective rather than a reversal of the overall bullish structure for gold.
2. Caution regarding the end of the correction: While gold is recovering from the 2625 level, it is premature to declare the correction complete. For confirmation that this phase has ended, the price needs to break above the 2650 zone and, crucially, close the day above that level. This would signal stronger momentum and increase the likelihood of further upward movement.
With this in mind, the strategy for swing traders remains focused on buying the dips. Until we see a decisive break and daily close above 2650, low volume is advised.
If that level is successfully breached, it would serve as confirmation that the recovery is gathering steam and could potentially open the door for gold to target the 2700 level in the near term.
In conclusion, while the current correction may have created an opportunity to enter at lower levels, traders should remain cautious and await a clearer signal before committing high volume long positions. The 2650 zone remains the key level to watch for further bullish confirmation.
As it stands, XAU/USD has indeed dropped to that level and is currently showing signs of recovery.
However, there are two key takeaways from yesterday’s price action that need to be highlighted:
1. The correction fits within the broader bullish trend: Despite the pullback, it is essential to recognize that the movement appears corrective rather than a reversal of the overall bullish structure for gold.
2. Caution regarding the end of the correction: While gold is recovering from the 2625 level, it is premature to declare the correction complete. For confirmation that this phase has ended, the price needs to break above the 2650 zone and, crucially, close the day above that level. This would signal stronger momentum and increase the likelihood of further upward movement.
With this in mind, the strategy for swing traders remains focused on buying the dips. Until we see a decisive break and daily close above 2650, low volume is advised.
If that level is successfully breached, it would serve as confirmation that the recovery is gathering steam and could potentially open the door for gold to target the 2700 level in the near term.
In conclusion, while the current correction may have created an opportunity to enter at lower levels, traders should remain cautious and await a clearer signal before committing high volume long positions. The 2650 zone remains the key level to watch for further bullish confirmation.
Trade attivo
In the short term, a new low is not out of the question
2650 could be problematic for bulls
Short-term traders could look for selling opportunities in that zone, keeping in mind the overall bullish trend though when setting stops and targets
Trade attivo
XauUsd broke above channel s resistance.
A daily close above this level would signal the final of correction
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