FxWirePro: Gold hits 13-month lows after sliding below 21-SMA on shooting star – Stay short as more slumps on cards

The bearish streaks in Gold prices have continued today; the current price of the precious yellow metal commodity is trading at $1,210.88 despite some minor rallies in this trading session. While the minor trend slides through falling wedge pattern which is bearish in nature (daily chart). 

Bears in the gold’s major downtrend breaches below rising wedge support, back-to-back shooting stars have occurred at $1,325.03 and $1,315.20 levels respectively. As a result, you could see steep price slumps below EMAs with bearish crossovers. For now, it is on the verge of dragging more slumps to hit fresh 13-months lows as bearish EMA & MACD crossovers indicate further weakness (refer monthly chart).

While both leading oscillators (RSI and stochastic curves) show downward convergence to the price dips to signal intensified bearish momentum on both timeframes. 

The dollar can happily ignore the US inflation data for July due for publication today, as it will not provide any significant news. The overall rate remains just below 3% due to energy prices and is likely to have peaked now. Core inflation might only record 2.2% today rather than the expected 2.3%. That is not a drama though as it nonetheless remains above the inflation target. The data fits into the picture of a Fed continuing with its rate cycle for now

Trade tips: Contemplating prevailing bearish sentiments, we advocate staying short via buying XAUUSD (1%) in the money -0.79 delta put options of 1w tenors, the rationale for choosing this derivative instrument is that the deep in the money call with a very strong delta would move in tandem with the underlying move.

Currency Strength Index: FxWirePro's hourly USD is inching at 87 (which is bullish), while articulating (at 09:44 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex