Tentative long set-up appears to be in making
Cautiously long, expecting a break above 1720-30 for safe long.
Here is a weekly chart for Gold continuous futures. Those who follow gold closely, know that it is in a painful range for more than a year after hitting all time high in 1923 area. The ranges are very difficult to trade for trend followers and price action is choppy and churning, resulting in many bad trades or scratch trades and eventually everyone throws in the towel before a move develops out of the range. Gold has been in 1800-1500 range for more than a year now (yellow dashed lines).
After consolidating at the bottom of the range, Gold made an attempt to break to upside (see grey oval) last summer which are promptly halted at the top of the range. However I feel that the move is not completed and subsequent reaction (red dashed line) was a correction in the up move. This correction appears to have been completed.
However the move is not confirmed yet on bigger time-scales. Only on daily time-frame Gold has given a confirmation of failed short set-up followed by confirmed long set-up. In great scheme of things it is a minor signal but worth paying heed to.
For confirmation Gold would need to break above 1710-30 area above, which are now resistance.
My initial target on Gold is 1691 followed by 1730. The upside targets are 1895-2065 which will get clear as the move develops. Any break below 1600 will negate this analysis and could potentially set-up for a break outside the range on down side. That would require a new post. Since the initial risk on the trade is high (about 80$), the position size needs to low and cautious. Once the move is confirmed, the stops can be moved up and size increased accordingly.
I will update the progress via comments as the trade develops.
