Overview:- By analyzing the daily technical chart we can see that pair has entered in
the very narrow range and we can see that tug of war is going on between bulls and
bears. The pair is unable to move on either side as we can see that every trading
session is getting choppy. The 2.0500 and 2.0400 was the strict range of trading where we need a valid breakout on either side with a daily closing will give us new buy or sell signal. The short term trend has become range bound so traders are advised to be cautious for the position as we may see many traps and false breakout at both side and positional traders are advised to wait for the right time.
But recently bears have given us downside breakout of 2.0400 level and arrived at 2.0100 level where bears are taking the charge and it seems like it is just a starting further weakness is still awaited.
Technical Analysis: – From technical prospective we can see that a symmetrical
triangle pattern has been posted on the daily chart which has been breached out and
we got already a downside signal. The MACD lines are overlapping with signal line but now trying to give bearish crossover for the time being and RSI is also trading below 50, so both the indicators are generating bearish signal.
What next:- The 2.0400 level is psychological level for bulls. Presently pair is trading
below the moving average lines. Overall gold is trading in downtrend so we would
suggest to sell on high from short term point of view. Odds are in favor of bears and we will keep our bias bearish on the gold as long as 2.0400 level remains intact. The 2.0100 is the key support level followed by 2.0030 level whereas 2.0500 is key resistance level followed by 2.0550 level.
Trade idea:- Based on the chart and study above we are expecting that go for short at current levels 2.090 level for the target of 2.0202,2.0050 stop loss above 2.0500
