Technical Outlook and Chart Setups:
It has proved to be a bit early in defining 1775.00 as core resistance yesterday. A classical trading setup is being carved out here. The rally till now is impressive, but technically this looks to be setting up for a reversal!
1. Gold peaks out at 1787.00(Head)
2. The metal drops and takes out support at 1750.00 level.(Neck Line)
3. The present rally maybe carving out a lower high below 1787.00. (Right Shoulder. The Left Shoulder is placed at 1778/80 levels.)
If the above count is correct, the yellow metal is set to see 1700.00 level soon. This looks to be a tough trade call, but as they say, "trading is all about taking smart chances...". On the contrary, a break of 1790 leves, will help the yellow metal to rise towards fresh highs. At the moment, shorts are favoured.
Trading Recommendations:
Go short again, stop at 1792.00, Target at 1700.00 and 1650.00. Risk/Reward ratio offered is the optimum.
Good Luck!
