Live Trade Order – XAU/USD

Filed under: Live Trades |

I currently have a live order in play on the XAU/USD pair (which is the pair for gold and the US dollar). If you take a look at Figure 1, you will see the setup in question.

 

Figure 1.

Figure 1.

The main reason that I have placed this order is the excellent level of support/resistance in the middle of this chart (marked with a horizontal green band). This proved to be a very strong resistance area on a couple of occasions, and now that price has broken through this level, it could turn out to be an excellent area of support as well. So, when price reached this level once again and formed a bearish engulfing pattern, I put an order in to go short just a few pips below the low of this bearish candle (for confirmation), with a stop loss placed just a few pips above the high of the move, and a target set of two times the risk. This order has not yet been filled, but price is currently continuing to move down.

 

My only reservation about this one is that the 8-day exponential moving average has recently crossed above the 21-day exponential moving average; signalling that the market is a little bullish at the moment. Therefore, we are going a little bit against this momentum with this order. However, hopefully, the level of support/resistance that we have our stop loss beyond will prove to have sufficient strength.

 

It should also be noted that, in the long term, this pair has been quite bearish for some considerable time, so although we are going against a little short term momentum, we would be with the long term momentum – which tips the odds back in our favour a little bit. Whilst I’ve been writing this, the order has now been filled, so we will see how this one pans out in the next few days.

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