The past week was extremely positive for gold. Unrest related to the situation in eastern Ukraine, the threat of an open armed conflict was the main fuel driving gold prices.
- Gold gains from the conflict in the east of Europe
- Price at the maximum in June 2021
- the bearish engulfment heralds a correction
On Monday, the price overcame the resistance of the symmetrical triangle and this morning established the maximum of 2022, reaching 1902.50 USD/oz.
On the H4 chart a bearish engulfing formation appeared, the maximum of the candle forming the formation is at the same time the aforementioned maximum of this year.
This may be an indication of a correction of the recent upward movement. It should be noted that the formation was formed in the supply zone, which increases the probability of falls. The probable target is support level 1878 $/oz.
An additional factor supporting this scenario is the downward divergence on the MACD.
Gold is seen as a safe haven in uncertain times, so if there is bad news from eastern Europe – the downward scenario may no longer hold.
The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions which you can attend from Monday to Friday.
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