Gold futures have been trading sideways this week. It has resistance around $945 basis the August; for the past two days, attempts to break over it have failed, leaving dojis. Along with the doji bar, yesterday had the narrowest range of the previous four sessions, giving a breakout setup for today. (I drew a red circle around yesterday’s bar).
Early action today saw a push to the 945 resistance area. A trendline off the last two swing highs came in at 943.90, adding to the resistance. As the push through 945 failed, the market turned lower. It found increased selling pressure at yesterday’s low of 933.60 (first breakout point), then 931.10 which is a 50% retracement of the rally of the past week.
From 933.60 to 922.70 is a move of $1090 per contract; day traders should probably have taken profits by now. Looking ahead, a close under the 931.10 level raises the odds of a retest of last week’s low at 913.20.
A break (and a recovery?)
