• FxWirePro: gold’s shooting star signals exhaustiveness, major uptrend extends saucer – trading & hedging setup

    Source: FxWire Pro - Technicals / 24 May 2020 04:21:29   America/New_York

    The gold price is edging above $1,730 levels, the precious yellow metal gains considerably from the last couple of days, especially after the lows of $1,455 levels. 

    Technically, on XAUUSD (Gold) price chart, bulls bounce back above DMAs with bullish crossover upon strong support (refer daily chart).

    While flurry of bearish candles (Shooting Stars, Hanging Man & Spinning Top) pop-up at stiff resistance zone of $1,745 levels, these bearish patterns coupled with the overbought pressures signal exhausted buying sentiments at this juncture.

    On a broader perspective, the major uptrend extends through saucer pattern (refer monthly chart).

    Bulls break-out stiff resistances of 1,705.56 level (i.e. 88.6% Fibonacci level) of December 2015 lows of (i.e. 1044.62) and October 2012 highs of (1922.88) as hammer counters at saucer (i.e. near double top neckline), the current prices spike off well above EMAs with bullish crossovers, the major uptrend is most likely to prolong saucer pattern upon bullish EMA & MACD crossovers, while both the leading oscillators substantiate the buying sentiments on this timeframe as well.

    Trade tips: 

    At spot reference: $1,735 level (while articulating), on trading grounds, one-touch call options trading strategy with upper strikes at $1,747 levels. The strategy achieves leveraged yields if the underlying spot FX keeps spiking higher towards upper strikes on the expiration.

    Alternatively, on hedging grounds, we advocated long positions CME gold contracts of June’2020 delivery as we could foresee more upside risks and intensified buying interests on safe-haven sentiments amid geopolitical turmoil and the global financial crisis.

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