XAU/USD Asian Session. Short. R:R - 3:1

15 nov. 2021

We have seen an extremely bullish DXY so far this week which should relate to a decrease in the price of gold since they are inversely correlated. However today we have moved relatively flat in the price of gold. If gold is to push higher, as shown on bullish HTF, we should expect a move to a supply area for better risk buys to enter the market, this area is shown on the chart as the pink area and is marked on where the expected TP1 should reach before any sort of major buying interest would occur. Now TP2 is located at the 0.618 fib retracement level after the big upwards move gold made after the CPI overshoot a week ago on Friday, depending on how bullish the dollar is tomorrow, if the pink support area does not hold, their will be a serious amount of liquidity to collect if price action breaks this area, in this scenario you should expect an impulsive break to 1840 (6:1 R:R) in the best case scenario followed by a stream of buyers quickly pushing the price back up. Gold has now become the inflation hedge and since a bullish DXY is not causing gold to fall lower we should assume that the demand for gold has really picked up and market sentiment is now bullish with 2000 as a potential end of year target. If 1840 holds then I will assume that the buyers buying here will be aiming for well over 1900 so highly recommend buying if price reaches this price point.
The selling should begin in the asian session since the buying pressure is becoming and looks exhausted so make sure to enter your trades sooner rather than later for better risk reward, because of this exhaustion we are able to use a much tighter stop loss which makes for better risk reward. If you are unsure then wait for price to break the support of the lower grey line and then retest it as resistance, then enter.