Gold rebound to $1950 and god rebound ushered in a key event (with trading strategy)

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On Friday (18th September), gold rose slightly, 15:30 (GMT+8) at 1,952.76 US dollars, increasing by 0.48%.

A 50-member group of House Democrats and Republicans released a $1.52 trillion coronavirus stimulus plan Tuesday in a long-shot attempt to break a months-long deadlock on providing relief to the pandemic-battered U.S. economy.

The proposal would provide another round of $1,200 direct stimulus payments for most Americans, with a $500 per child benefit. Businesses would get new liability protections -- a GOP priority -- while funds would flow to Democratic concerns, like food stamps, the Postal Service, and election security.

The “March to Common Ground” framework, led by Caucus co-chairs Tom Reed, a New York Republican, and Josh Gottheimer, a New Jersey Democrat, also contains money for Covid-19 testing, schools and childcare, and help for small businesses.

Under the Problem Solvers plan, total spending could increase to about $2 trillion if the pandemic continues, or shrink to $1.3 trillion if it subsides more quickly than expected. The White House had previously been willing to back about $1.1 trillion.

If the proposal passed, it may increase U.S. fiscal pressure, which will support gold prices and break the current situation of narrow fluctuations.

Although gold prices look vulnerable in the near-term, Ole Hansen, head of the commodity strategy at Saxo Bank, said that he expects the market to maintain its long-term uptrend.

He added there is significant market uncertainty will continue to keep a bid in the gold price; in particular, the unabated spread of the coronavirus continues to weigh on economic growth, he added.

“There is a risk that gold prices test the bottom of their current range around $1,900 an ounce,” Hansen said.

Trading Strategy (source: Trading Central)

Pivot: 1941.00

Our preference: long positions above 1941.00 with targets at 1961.00 & 1970.00 in extension.

Alternative scenario: below 1941.00 look for further downside with 1932.00 & 1921.00 as targets.

Comment: the RSI calls for a bounce.

Supports and resistances:

1983.00

1970.00

1961.00

1953.00 Last

1941.00

1932.00

1921.00

Guideline for Trading Central strategy 

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell. 

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference. 

4. [Comment] is the technical analysis of market trends and technical support for trading strategies. 

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.