Welcome to the new week and the new month. Today is public holidays in two European countries (France and Italy) and the liquidity may be slightly different from other days. When the banks are not functioning and are closed, the exchange transaction takes place without their participation, i.e. with less capital, which can sometimes see price jumps without justification. When more banks close, they don’t personally trade because the market is unpredictable, and there is often a very narrow range consolidation that cannot be made profitable.
Currently, we can see a downward trend that is evenly under the line we have drawn. In order to change direction, what is shown in the image must take place, i.e. the breakout of the current trend line, and any entry will occur after a correction near the local support. Of course, we remain in a downward trend until then, but today’s data are expected to worsen the situation in Switzerland and the current direction may break.
Even though I had a strong belief in gold’s further rise, unfortunately we are seeing a trendline breakout, which is the first signal for a reversal. The low time interval also begins to indicate declines, which is only a confirmation of a possible correction. I will wait before making decisions on this financial instrument, but now we have a chance of short positions with “SL” over local peaks in the time interval M5.
The chart of the German index clearly shows that the resistance was so strong that despite the pressure on the price increase in the Asian session, investors did not manage to break the price mountain. The current correction is a good foundation for short positions because we will consider further increases after breaking the indicated resistance. Currently, if nothing changes until the entry of European capital, then after 8 am I intend to look for entering a short position, unless the consecutive highs in the M1 / M5 time interval are higher than the previous ones, then it attacks a long position with a range of price resistance breakout.
Daily R3- 16020
Daily R2- 15870
Daily R1- 15800
Daily PP– 15650
Daily S1- 15560
Daily S2- 15410
Daily S3- 15340