The Weekly Update: Fundamentally Supported Trading Strategy

Greece, Again

The tag of war between Greece and Europe is likely to come to an end this week as Greece are likely to run out of funds by Friday. The market will therefore become overly sensitive to any developments between Greece and the Troika, which could in fact distort the technical end of the market. We are already enjoying a decent profit from our trades in EURUSD, NZDCHF and GBPCAD and find it completely unnecessary to increase out exposure in the FX markets at the time of this writing. We are however exploring the yellow metal for safe-have demand and a possibly bearish FOMC statement that could spark a fresh USD-selling in the Foreign Exchange market, which is likely so spill over into XAU/USD.

Gold Technical Strategy

Gold suffered heavy losses on Friday, driving the price to  daily low of 1,175.10. We are however noticing the potential for reversed Head-And-Shoulders (H&S) where the recent dip is simply a mutated shoulder of the reversal pattern. Locating an entry in gold with minimal exposure is a tough task due the commodity’s volatile nature. Below is XAU/USD daily chart, outlining the strategic levels for our trade setup.

Gold Daily Chart

Please click on the chart to enlarge:

Gold Trading Strategy, 26 April, 2015

Gold Daily Chart, 26/04/15

The key support lies at 1,178.00 (blue line), which could paint the second right-hand shoulder. Our prior concern is that the price may retrace to 1,167.00 to take out the weak stops before climbing higher. The protective stop for the long trade must therefore be placed below 1,163.00 to protect our trade from the possible volatility.The take profit for the trade alert will be at 1,124.50 as we believe the neckline is likely to be breached some time this week.

The fundamental trigger for the anticipated rally in gold is likely yo be the FOMC statement where we would expect a dovish statement from the Fed that will result in a mass USD-selling in the market. The uncertainty around Greece may also contribute to the safe-haven characteristics of gold before a final resolution will be presented at the end of the week. We are unable to determine the protective stop and the entry price for Gold until it opens for trading at 22:00 GMT. We will notify you via an email once we located a clean entry. A gap higher in gold will harden our entry into the market as this would mean a substantial increase to the protective stop size.

Gold Trade Alert Details

Gold long at: market price (1,179.03)
Protective stop: 1,160.00
Take profit: 1,124.50
Risk Ratio (RR): 1 : 2 (approx.)
Estimated duration: 14 days

We are monitoring certain currency pairs in the Forex market but we more time is required for a technical entry to develop. When an entry is provided it will be published in the ‘Trade Alerts’ section. We are satisfied with our current trades in the market and will only increase our FX exposure if a perfect entry is provided. We strongly suggest to monitor any developments from Greece as the market is likely to be on edge until more clarity is shed on the future of Greece. We will post updates regarding the trade setup in gold when the markets open from the weekend break.

27/04/15 UPDATE: After monitoring Gold’s opening price, we are executing the long trade at market price, protective stop layered at 1,160.00, targeting 1,124.50.

27/04/15 UPDATE  II: Gold posted moderate gains in today’s session, as expected from our trading strategy.

Gold Daily Chart, 27 April 2015

Please click on the chart to enlarge:

Gold Daily Chart, 27/04/15

Gold Daily Chart, 27/04/15

We are closing 50% of the long trade at market price and shift the protective stop to the entry. In light of recent profit this trade alert can also be accessed by traders that are not subscribed to global trade alerts plan. To be notified and have a direct access on our future trade alerts sign up for one of our global trade alerts plans.

28/04/15 UPDATE; Gold continued its bullish momentum in today’s session, as we have anticipated at the beginning of the week.

Gold Daily Chart, 28 April 2015

Please click on the chart to enlarge:

Gold Daily Chart 28/04/15

Gold Daily Chart 28/04/15

We are closing 20% of the long trade at market price and shift the protective stop to 1,195.00.

03/05/15 UPDATE: With a slight delay, Gold has triggered the protective stop we have shifted above the entry after liquidating partials. We have ended the long trade in Gold with a decent profit.

As XAU/USD (Gold) trade is closed it can  now be accessed by all traders. Open trades are restricted to members only. We have been proving trade alerts in the spot Forex market since May 2014. Sign up for one of our plans and review our documented trades performance.


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