Gold in Descending Triangle — Short on breakdown

19 בנוב׳ 2020

• Since August, we see that gold has been trading in a descending triangle. Price broke the downward sloping resistance in early November, only to sell off harshly on November 9 following news of a promising vaccine, then continuing to trade inside the triangle pattern.
  
  
• In the near-term, a large move should be expected, and looking at the PA here a short position could be on the cards. In the long-term, however, the case for gold remains largely bullish. The main trade idea is that if price closes below the current support structure, we could look to short towards one of the two support zones below.
  
  
• The first support zone lies around $1800. There has been some (minor) previous price action/consolidation here, and there's a minor node present on the volume profile. Importantly, the area also coincides with the 200-day exponential moving average, which could offer support. Is it enough to bounce on?
  
  
• The second support zone is located in the previous range between $1670-1750. Much trading has occurred here, as can be seen in the large node on the volume profile.
  
  
• Besides techinical analysis, the fundamental factors at work continue to dictate price movements. The macroeconomic environment, anticipation of stimulus packages, and developments in the spread of the virus, influence the demand.