FxWirePro: Gold tests support at double top neckline in short term trend, bears linger in major consolidation phase

The double top formation with top 1 at 1295.46 and top 2 at 1296.06 & neckline at around 1212 levels, rallies have tested support at this neckline.

Shooting star signals weakness, but the current prices are hovering at 21EMAs in the consolidation phase.

Historically, as and when shooting star pattern also popped up at the resistance levels, gold prices have tumbled in the consolidation phase both on daily as well as monthly terms.

RSI and stochastic curves are converging to the price drops to indicate the strong selling momentum.

While current prices on this timeframe have been spiking higher above DMAs (on daily charts) and hovering at EMAs (on monthly charts), that is where shooting star pattern has occurred in the recent past.

MACD, on the other hand, has been indecisive.

For an intraday speculation, we see the price to remain within the range between 1250 and 1233 (i.e. also 21EMA levels). Hence, we advocate buying boundary binaries with upper strikes at 1250 and lower strikes at 1233 levels.

The trading between these strikes likely to derive certain yields in this puzzling trend and more importantly these yields are exponential from spot movements.

For cash or nothing, these options would be exercised if the forward prices to remain between both strikes (i.e. 1250 > Fwd price > 1233).

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