Trigger Levels and Market Response
Therefore, a one-day bullish reversal in gold triggers with a move above Thursday’s high of $4,220, supported by the failed breakdown. Failed patterns can lead to sharp moves in the opposite direction and that is what the “undercut-and-run” setup seeks to capture – the potential flip from sellers being in control to buyers taking control near a key pivot zone. However, this is an advanced entry technique for experienced market participants. Even though there is a one-day bounce from the new trend low of $4,024, support may still be further tested near current lows and the uptrend line.
Lower Support Risk Scenario
If gold falls below the uptrend line, the next lower target zone is around $3,929 to $3,873, consisting of prior support and the 127.2% projected target for the ABCD pattern.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
