FX.co ★ Trading idea for gold

The recent Fed minutes said members are already considering a possible tightening of monetary policy, hence, demand for the dollar soared yesterday by the end of the US session.

At the same time, cryptocurrencies crashed by more than 50%, which is very bad news for gold because investors will most definitely transfer into the crypto market now that its prices are cheaper.

Considering this, the best action is to sell gold, and this can be done by following this strategy:

Since a three-wave pattern developed in the market and wave A represents the selling pressure yesterday, traders can open short positions in order to set off a 50% pullback from 1875. Place stop loss at 1883, and then take profit as soon as the price hits 1860 or 1851.

This idea follows Price Action and Stop Hunting methods.

Good luck and have a nice trading day!