Trading the financial instrument is very much popular nowadays among the retail traders. Though the financial market offers an extreme level of profit potential to the traders but very few traders can actually nail the market like the professional Australian traders. Gold trading is very much popular in Australia and most of the expert traders do extensive research in the market before executing any orders in the CFD trading industry. Since the price of gold is measured in U.S dollar a slight variation in the value of the green bucks’ strength significantly affect the price of gold in the CFD trading industry. Currently, the U.S dollar index has secured a six-month low in the global market and this has pushed the price of gold significantly higher.
Let’s see where the market sweet spot is
From the above figure, you can clearly see that the trend line resistance has been supported with the 61.8 percent Fibonacci retracement level which is very rare in the financial market. The professional gold investors are cautiously waiting in the sideline to short the gold. Once the market hits the bearish trend line resistance level at 1278 and forms a nice bearish price action confirmation signal we can safely execute our short trade and trade in favor of the long-term bearish trend of the gold market.
Still, there is room for the price of gold to rise?
Indeed the price of gold is supposed to rise in the upcoming week and hit the trend line resistance. The professional gold traders will book their profit in the CFD trading industry once the market goes close the 61.8 percent Fibonacci retracement level. Most of the time the financial market respects the Fibonacci retracement levels and continues its movements in favor of the long-term existing trend. So those who are trend traders are sure to trade the possible classic setup of the gold market.
The U.S dollar index
The U.S dollar index has been trading lower in the global market for the six consecutive months and currently, the index value is also heading towards a strong support level in the market. This is what makes the setup of the gold bearish trend line so lucrative. The U.S dollar index is most likely to bounce up after hitting the critical support level at 96.19 in the global market. This level is going to provide a significant amount of support of support to the U.S dollar index which will ultimately boost the green bucks in the global economy. And a stronger dollar usually results in the bearish rally of the price of gold. So technically speaking the U.S dollar index and the price of gold is slowly heading towards the market sweet spot and the patient Aussie traders will have a golden trade setup near the bearish trend line resistance of the gold market.
Summary: The U.S economy has been struggling pretty hard under the new administration of the Mr. Trump as he has failed to keep his promise regarding tax cut policy and an increase in the fiscal spending. The dollar is slipping lower in the global market, yet the optimistic dollar bulls are still hoping for a strong turnaround in the upcoming weeks. The FED has projected three rate hikes in the year 2017 and they are most likely to hike their interest rate on the month of June to bring stability in the U.S economy. If FED chairperson Janet Yellen manages to come up with a hawkish hike then we will see another strong bullish rally in the U.S dollar index which will ultimately push the price of gold lower in the global market.
