Gold has now moved lower after forming a large and commanding bearish engulfing bar (BEEB) on the weekly price action chart. After breaking the low of the BEEB on the weekly chart and confirming the setup price moved lower and is now moving lower into the near term support levels. Sitting just under the BEEB was a minor support level, so for this BEEB to work out, a strong break lower as has happened was needed for price to gain momentum and move lower.
Price is now moving into the near term support levels on the weekly chart. Other than the minor support sitting just under the BEEB’s low, this setup was a high probability engulfing bar that ticked a lot of boxes that price action traders look for. The most important factor for any high probability price action setup is where the trade is taken and the price action story and with this setup the BEEB was rejecting a key weekly level that had been a proven resistance level in the past. The other factor that this trade had going in it’s favor was that if price could break the minor support, it then had room to move before then hitting the next near term support level. The Bearish Engulfing Bar itself was a textbook engulfing bar that was up at a bearish swing high, sticking out and away from all other price and was large and obvious.
GOLD Weekly Chart
Leave a Reply