Tuesday, July 22nd, offered a textbook example of a trend continuation in the gold market. The price action perfectly demonstrated the characteristics of a strong bullish trend throughout the session.
The day began with an immediate follow-through rise from the previous day's gains during the Asian session, which was then extended with another leg higher during the European session. This sequence forms a coherent and powerful upward progression, sending a clear technical signal of sustained momentum driven by consistent bullish sentiment and orderly capital inflows.
As noted at the start of the week, a decisive break above 4143 would pave the way for further advances. Following such a key breakout, any pullback presents a buying opportunity. The level of 4043 has now transformed into a support zone, a critical area for short-term trend direction. Reviewing yesterday's price action confirms this, as the low point of the day's pullback was precisely in this vicinity, making it the logical reference for initiating long positions, which we did. Our strategy of targeting buys around the 4043 support was validated, with price finding support there and consolidating at elevated levels into the close.
With the market closing strong and extending gains in early Asian trading today, the focus for observation and execution revolves around a few key points.
Key Technical Levels and Strategy
First, the prior high around 4080 has been breached and now acts as a new support level. This area, which also coincides with today's early Asian session low, serves as a critical line for gauging the day's bullish strength. As long as price holds above this level, the trading bias should remain firmly tilted towards buying on dips.
Intraday Execution Plan
Second, if the market does not experience a significant pullback during the afternoon session and instead consolidates in a strong, sideways manner, this would be a sign of underlying strength. In such a scenario, actively entering long positions above the 4100 psychological level between 1-3 PM, targeting a retest of the morning's highs, would be appropriate.
Confirming the Trend for the US Session
Third, a breakout above the morning's high during the European session is a crucial signal for continuation into the US session. The success of any long positions initiated in the afternoon hinges on this confirmation. A European session breakout would indicate robust intraday momentum, increasing the likelihood of follow-through buying later. In that case, the same logic applies: look for pullback opportunities before the US session opens to add to long positions.
Trade Setup
For specific intraday action, consider long positions on gold around the 4100 level in the afternoon, with a stop loss set at 4080, targeting a 50-point gain.
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