Chart of the day

XAUUSD is testing the strong resistance of 1950. A bounce higher from here leads higher to the upside extension and a test of 1985 again where it could reverse or continue higher.

This is still viewed as completing the medium-term fourth wave pullback of the five waves upside if we get a confirmed break above 1950 now. A break below 1930 is now required for a downside reversal and invalidation of the possible upside reversal. A break below this level will confirm that the upside five waves are possibly finished and open a short trade possibility, or we could see a deeper fourth wave pullback.

Long trade, you can open up on a confirmed break above 1950. You can only open short trade entries in the case of a confirmed break below 1930. We favor the long trade entries as we expect an upside extension from this vital support at the rising wedge. You can trade this price action using an options strategy as well.