A recent strong bullish run has seen Gold reach prior resistance highs. Given the likelihood of buy orders above these highs our ideal scenario was for a false break to give us a bias to the short side. This is exactly what happened on the close of the latest daily candle. We can can see a clear false break leaving a strong bearish candle.
Any traders who initiated longs on the break of the recent swing highs will now be trapped, this gives us a further catalyst for price to move to the down side.
On the H1 chart we can see MACD divergence across the recent highs and price has now closed beneath the 50EMA. We will look to initiate a short trade on a pull back to the daily pivot, appropriate price action will be our trigger to enter short.
Stop loss will be placed just above the daily level at 1293 and also well above the R1 pivot level. Targets will be placed around the last daily swing low at 1270