Monday, breaking below the 50-day EMA but finding the $4,400 level supportive enough to turn things around quite drastically in the early part of the day.
As things look now in the early part of the US session, it does look like we are trying to turn things around and show signs of life with the candlestick possibly forming a hammer. But really at this point in time, you have to be fairly careful to just jump in without some type of follow-through momentum.
This is a very good sign, but let’s be honest here: we have been as much as $1,200 off the highs in just a session and a half or so. And with that being the case, I think you have to be very cautious, but you also have to recognize that the uptrend is still very much intact.
Market Sentiment and Strategy
Central banks around the world continue to buy gold and I do think that geopolitics will probably continue to make it somewhat supported in any way. So, with all of that, buying on the dips type of strategies probably continue to work, but I would also be very cautious about throwing in a huge position right away. This is going to be more about trying to build a position than anything else or letting other traders take on the risk of turning things around for the short-term. I don’t necessarily want to short this market, but caution is the most important part of any long here.
Source: Fxempire.com
