Technical analysis by TheFXCapital about Symbol PAXG: Sell recommendation (5/21/2024)

Given the current price of XAU/USD at 2418 and a target price (TP) of 2390, here’s a detailed technical analysis and trade setup for a short trade based on the specified conditions. ### Technical Analysis for XAU/USD Short Trade #### Current Market Context - **Current Price:** 2418 - **Target Price (TP):** 2390 - **Pips Targeted:** 28 pips #### Key Technical Indicators 1. **Support and Resistance Levels:** - **Resistance:** The recent high and significant resistance level. Let's assume recent resistance is around 2425. - **Support:** Target support level at 2390. 2. **Moving Averages:** - **50-period EMA:** Check if the price is below the 50-period EMA on the 1-hour chart, indicating bearish momentum. - **200-period EMA:** Confirm if the price is also below the 200-period EMA to reinforce the bearish trend. 3. **Relative Strength Index (RSI):** - **RSI Level:** Ensure the RSI is below 50 on the 1-hour chart to confirm bearish momentum. - **Overbought/Oversold:** Ensure the RSI is not in the oversold region (below 30), which could indicate a potential reversal. 4. **Fibonacci Retracement:** - Draw Fibonacci retracement levels from the recent swing high to the recent swing low. - Identify key Fibonacci levels around the current price and check if there is confluence with other indicators. 5. **Candlestick Patterns:** - Look for bearish reversal candlestick patterns on the 15-minute and 1-hour charts (e.g., bearish engulfing, shooting star). #### Trade Setup 1. **Entry Point:** - Enter the short trade at the current price of 2418. 2. **Stop-Loss:** - Place the stop-loss above a key resistance level. If recent resistance is at 2425, consider a stop-loss around 2428 to allow for market noise. 3. **Take-Profit:** - Set the take-profit at the target price of 2390. #### Example Trade Plan - **Entry Price:** 2418 - **Stop-Loss:** 2428 (10 pips above entry) - **Take-Profit:** 2390 (28 pips below entry) - **Risk-Reward Ratio:** 1:2.8 #### Risk Management - **Position Sizing:** Determine position size based on risk management rules. For example, if you risk 1% of your account on this trade, calculate the position size based on a 10-pip stop-loss. - **Monitoring:** Continuously monitor the trade for any signs of reversal or unexpected news that could impact the market. #### Example Calculation for Position Size Assuming a trading account with $10,000: - **Risk Per Trade:** 1% of $10,000 = $100 - **Stop-Loss Distance:** 10 pips - **Value Per Pip:** $10 (for a standard lot) Position Size = Risk Amount / (Stop-Loss Distance * Value Per Pip) Position Size = $100 / (10 pips * $10 per pip) = 1 standard lot #### Conclusion The trade setup for shorting XAU/USD at the current price of 2418 with a take-profit target of 2390 and a stop-loss at 2428 offers a favorable risk-reward ratio of 1:2.8. By using key technical indicators such as support and resistance levels, moving averages, RSI, Fibonacci retracement, and candlestick patterns, the trade is well-structured and aligned with market analysis. --- This analysis is hypothetical and for educational purposes. Actual trading decisions should be based on real-time data and individual analysis. Always ensure proper risk management when trading.