Gold Is Moving Within A Trend Channel

For the past twelve hours Gold has been moving to the upside in a trend channel with a height of 53 pips at its base and it has formed four points of contact so far. That gives us the opportunity to trade the breakout of that channel, regardless of its direction.

At a first glance this channel looks like a trend-continuation flag pattern and that would be confirmed if the breakout is to the upside. Should that happen we could expect a move to the upside towards 1180.

If Gold breaks out to the downside I think the closest target will be at 1150, and a more long-term target will be at 1110.

If we judge by the bars that are forming above the support at 1155 we could conclude that Gold will move to the resistance trendline again. Still, while Gold is moving within the channel it should be traded with caution.

Great Traders: Fascinating Facts About Stanley Druckenmiller

In one of my last posts for this year I decided to focus on yet another famous Forex trader – Stanley Druckenmiller. Although George Soros’ legacy as a trader is certainly one of the most memorable, his pupil Stanley Druckenmiller boasts an impressive record himself. So here are some interesting and fascinating facts about him:

-The son of a chemical engineer, Stanley Druckenmiller was born in a middle class family. He received a BA in English and Economics from Bowdoin College. During his studies there he opened a hotdog stand with one Lawrence B. Lindsay, who would later become an economic policy adviser to President George W. Bush. Later he took part in a three-year PhD program in economics at the University of Michigan, but dropped out to become an oil analyst at Pittsburg National Bank.

-He became the head of the the Bank’s equity research group after only one year. He founded his own company, Duquesne Capital Management, in 1981.

-He was hired by George Soros to work at the Quantum Fund in 1988. Druckenmiller considered Soros to be his mentor and he was part of Soros’ infamous Black Wednesday trade.

-Stanley Druckenmiller’s current net worth is $4,4 billion. 

-His trading strategy revolved around building long-term returns by preserving his capital and aggressively pursuing profits when his positions were doing well.

-Druckenmiller is one of the most generous philanthropists in the USA – he has given hundreds of millions of dollars to foundations that support education, medical research and anti-poverty.

Trading With Trendlines: USD/JPY Today

USD/JPY broke above the resistance trendline (in red) of a pattern which could be interpreted, with some caveats, as a triangle though not a classic one. The pair then tested the trendline it broke above and started climbing.

The move to the upside is also developing in a channel between a pair of parallel trendlines (in blue). In case the pair breaks out above the channel we could expect for it to reach the limit of the red triangle it broke above, which is at 1.1950.

In case the pair breaks below the blue channel, we could conclude that the breakout above the triangle was false and that there will be a deeper correction to the downside.

Since the pair has rallied for almost 1750 pips without a correction, we should be exceedingly careful when opening long positions.

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The Forex Calendar for This Week

Even during the holidays the Forex market does not fully shift into vacation mode. Although during these few weeks of the year the volatility is famously pretty low, there are still some events that cause excitement among people who still trade between Christmas and New Year’s Eve. Here is the Forex calendar for this week:

-Monday is a holiday and the market is closed.

-On Tuesday we can expect the release of the US CB Consumer Confidence. 

-On Wednesday there are no high impact news events.

-On Thursday the US Department of Labour will release the data about Unemployment Claims. Also, we can expect data about the US Crude Oil Inventories , released by the Energy Information Administration.

If you’re planning on trading between the holidays I recommend both caution and opening short-term positions in the light of the low volatility on the market.