XAUUSD - KOG REPORT!In last weeks KOG Report we were looking for our 1980-85 target to be completed at some point over the week and suggested we would like to see some bearish pressure after the completion of the target. We managed to hit the target giving followers an opportunity to long the market in to the region, however, as you can see the price overstretched our selling zone before then giving us the short into 1960 levels. That’s where we saw a resumption of the bullish momentum take over and you can see what happened next. We didn’t get the lower targets that we wanted but the opportunities to take the long and the short gave us a good capture. Overall, we hit 8 targets in Camelot with 3 of them being on Gold, so a quiet but good week all in all.
So what can we expect in the week ahead?
There are many bullish traders in the markets looking for this to go and test the ATH, we’re also expecting an attempt to test that recent high again but we’re hoping for this to test that lower support region at some point to give us a better entry for the long. We can see this opening like the last couple of weeks with a gap, our bias being a gap to the upside.
So as always, based on the illustration there are two scenarios here based on how the market opens.
Scenario 1:
If this opens and goes down first, we won’t be looking for any shorts on the market. We will be looking for support at the lower levels of 1970-60 and just below that 1950-45 where will want to test the long trade into the higher targets of 2005 as the first target, this is where we will take some profits on the trade and protect the entry. The reason we’re doing that is because we’re expecting this to consolidate and range up until FOMC on Wednesday which is potentially where we will see the next breakout. Unless they move it before the release! So in summary, a test on the low, a test on the 2003-5 level where we see resistance and then a small decline before the push up (if it comes).
Scenario 2:
Market opens and we see the price go up, we’re going to play on the defense, there are key levels above where we are likely to see a reaction in price. Again, that 2003-5 level is sticking out for us, if we see resistance there, we may test the short trade with a small manageable lot size to target the lower support levels of 1980, 1975 and below that 1968 before looking to go long again. We will only do this is the price action and structure is right, otherwise we will stay away from shorting this at the moment unless it breaks below that 1940 level. We will be looking for this to go all the way up to test the 4H liquidity level as well as the daily trend line resistance level sitting around 2080-85 before attempting to short it again.
So this week we’re going to be cautious on the short trades unless we see a strong resistance and our bias will be to the upside as long as the price stays above 1940-45 price regions.
We’ve shared the Daily chart below to update you on the daily structure that we’ve been sharing recently. As you can see we have a potential trendline running all the way up for the double top test on the daily and 4 hourly which is situated around the 2080-90 price level.
We'll share our daily updates as usual with our views and trade ideas.
As always, trade safe.
KOG
