FxWirePro: Gold Back In Range On Shooting Stars But Major Uptrend On Verge Of Retracing 61.8% Fibos – Trading & Hedging Setup

Gold price gains considerably from lat 2-3 days (especially from X’mas season to Newyear) has extended the major uptrend. But this week, these price gains have been pared with profit booking sentiments.

Technically, XAUUSD (Gold) price chart forms shooting star patterns at 1564.40 and 1564.79 levels. 

Consequently, the price continue to slide further below 7DMAs coupled with overbought sentiments. 

Prior to which, as stated before in our recent post, bulls shrugged-off gravestone doji patterns pop-up at stiff resistance and extended the uptrend above DMAs, dragonfly doji counters with stern rallies.

From 2 days, the bears managed to plummet prices from the peaks of 1611.27 level to the recent lows of 1540.08 level (i.e. -4.4%), Today, it is drifting in sideway trend, currently trading at 1550 levels to resume range-bounded minor trend.

On a broader perspective, Bulls break-out stiff resistances of 1557.50 level and retraces more than 50% Fibonacci levels of December 2015 lows of (i.e. 1044.62) and August 2011 highs of (1922.88) as hammer counters at double top neckline, current prices spike off well above EMAs, the major uptrend to prolong on bullish EMA & MACD crossovers, both leading oscillators substantiate.

Trade tips: 

On trading grounds, boundary options trading strategy with upper strikes at 1561.24 and lower strikes at 1510 levels. Achieve certain yields as long as the underlying spot FX remains between these two strikes on the expiration.

Alternatively, on hedging grounds, we advocated long positions CME gold futures contracts of 2019 deliveries. We again upheld the same strategy by rolling over the contracts for March’2020 delivery as we could foresee more upside risks and intensified buying interests on safe-haven sentiments amid geopolitical turmoil and the global financial crisis.