Trade Recommendation: Gold/Indian Rupee
The Gold/Indian Rupee pair (XAU/INR) started its bull run in December 2015 when it printed a higher low of in 69,457.3. The bullish price action attracted a lot of interest as the pair quickly went parabolic. The momentum surge pushed the market to as high as 92,555.8 in July 2016. In less than a year, the market grew by almost 25%.
Unfortunately for buyers, the market capped off the fifth and final wave of the bull run at this level. In addition, the market’s inability to move above 92,000 after several attempts was a clear signal that bulls were exhausted. XAU/INR dropped to 82,740.1 in October 2016. While bottom fishers bought the dip, they could only carry the pair to a lower high of 89,412.9 in November 2016.
With a lower high in place, the pair went into a downward spiral. It nosedived to as low as 76,289.3 in December 2016. From there, it created a series of higher lows to jump start its bullish momentum.
Technical analysis show that the Gold/Indian Rupee pair has taken out resistance of 85,000. This triggered the symmetrical triangle on the weekly chart, which ended the market’s corrective period. Currently, the pair is pulling back from the breakout. This could be your opportunity to buy near the breakout point.
The strategy is to buy as close to 85,000 as possible. Once the brief consolidation period is over, the market will resume its ascent to our target of 97,000.
The process may take six months.
Weekly Chart of XAU/INR
As of this writing, the Gold/Indian Rupee pair is trading at 87,952.2.
Summary of Strategy
Buy: As close to 85,000 as possible.
Featured image courtesy of Shutterstock.