Many traders were not expecting this small crash in Gold prices, but as we mentioned here so many times, if you don’t respect the support and resistance levels you are going to pay. We have mentioned many times before that Gold had a very important support at 1500-25$ area and that support was an important trend setting level. Breaking it would push prices lower, whereas staying above it would give bulls more chances to bounce. We all know what happened when prices broke below 1500$.
We talked about the huge sideways triangle in Gold for a long time. Breaking upwards or downwards from such an important pattern should be respected. So where are the similarities with Oil?
Oil is trading in a similar sideways triangle and I think will soon test the lower support. Whatever happens, traders should follow the trend and where weakness is found, traders should sell….where strength is found, one should buy. The initial targets if prices break upwards or downwards are shown in the chart above. We don’t care if it is going to break upwards or downwards. We just want to have a clear mind and do the right thing to follow the trend when a break out occurs.
We will keep a close eye on Oil prices and subscribers will get first notice if our analysis provides a good risk/reward setup to buy or sell.
As always, thank you for taking the time to read our new post.