In last night’s Swing Trader’s Insight advisory I labeled gold futures as a breakout setup. The combination of the daily triangle and Friday’s employment report made a breakout move likely for Friday; this signal worked well today.
Gold didn’t have an “official” breakout setup for Friday. There was a breakout setup for Thursday (ID, NR4, doji on Wednesday) however there wasn’t a decisive move, and it closed within Wednesday’s range. Add to that the triangle on the daily chart and Friday’s employment report and you had a good candidate for a breakout move.
On the downside there were two levels to watch. (I’ve been bearish on gold so I preferred to short it however I try to be open minded about direction with breakout trades.) First was Thursday’s low of 1256.10. Second, and more important, was the 29 Jan. low of 1252.10.
The employment report came out better than expected, quickly pushing the USD up and gold down. The break of either low was a signal for a short sale, and the selloff followed through as the morning progressed, with the USD rally adding impetus to the selloff in gold. The selloff stopped at the 50 day SMA (1227.50).
Essential Guide for Futures Swing Trading
In this guide, experienced trader and broker Scott Hoffman explains the trading methods he uses to analyze and trade the futures markets and to publish his trade advisory, Swing Trader’s Insight.
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