The XAUEUR or GOLD V EURO price has now moved up higher and into a very important area on the daily chart around the 984.50 level. Whilst the GOLD V USD has been flogged and has been heavily sold off for the past months and weeks, over the shorter term the GOLD V EURO has been trading sideways after a rally higher. Whilst this market also came in for heavy selling over the longer term, in the shorter term we can see a clear difference between the USD and EURO Gold markets.
Within the sideways range price has moved higher and into a key daily level that could prove crucial to where price goes in the short term for this market. As the zoomed out chart shows below; this key daily level has been super important and has acted as a barrier for price moving higher now on many occasions. If price can bust higher and make a close above the key level it could act as a dam buster and price could then make a hard and fast break higher and into the space above.
As I often cover in this blog and I also discuss in-depth in the trading lesson How to Trade High Probability Price Action in Ranging and Sideways Markets when price is in a ranging market it makes it a lot harder for price to make a sustained move either higher or lower because there is no clear trend or no clear market bias and because of this every minor support or resistance can then have the ability to become a trouble area and halt price in it’s tracks. This often happens and price will then often end up bouncing around up and down going sideways. This is why it is so much better to look for trades when price breaks out of these consolidation areas because the market has shown it’s hand and a clear direction that price wants to move in has been declared with fresh momentum.
If price can break higher, then the best setups to look for would be the breakout and re-test setups looking for price to make quick re-test of the old resistance and new support area. If price cannot breakout higher, then it would appear likely that more sideways action would be on the cards and in that case traders need to approach with caution and patience. Of course this resistance level is still valid until it breaks and so if traders want to take short trades (should bearish price action present) it would not be wrong, but as I have mentioned above; they would need to be aware of the market type and prepared to enter a market that is very choppy and has many minor support levels lower that could act as trouble spots.
Special Note: I have just released a new trading lesson that will help you learn how to automatically work out trading position sizes straight from your MT4/MT5 charts and keep an eye on your overall risk with a very cool and easy to use indicator. To read this new lesson see here;
Automatically Manage Your Money With the Metatrader Position Size Indicator
Gold v Euro Daily Chart
Gold V Euro Daily Chart Zoomed Out
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