FX.co ★ Trading idea for gold

Dollar rose after US President Joe Biden said corporate tax rate will remain below 28%. Major US indices such as the S&P 500 increased as well, as Biden offered Republicans a 15% minimum corporate tax as a way to fund a bipartisan infrastructure package.

Accordingly, this news broke the upward trend in gold, setting off a sudden but massive sell-off in the precious metals market. But gold buyers kept the support level, leaving a double bottom at 1852.

So, there is a three-wave pattern (ABC) in the trading chart, where wave A represents the selling pressure observed yesterday.

Considering this, investors can open short positions in order to launch a 50% retracement from 1880. Place stop loss at 1900, and then take profit on the breakdown of 1892. This plan follows both Price Action and Stop Hunting methods.

Data on US employment could influence the market as well.

Good luck and have a nice trading day!