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Gold declined yesterday after a week-long rally. It remained at lows until the close of the trading session. Accordingly, bulls were able to set stop loss under $ 1,845.
As seen in the chart, there are three wave patterns where wave A represents the selling pressure seen on Tuesday. This enables bears to take short positions up to the 50% retracement level of $ 1,860 - $ 1,864. As such, stop loss could be set at $1,872, while profit could be taken on the breakdown of $1,848, $1,844 and $1,840.
The profitability of this transaction is 1.5:1.
Good luck and have a nice day!
The analysis is based on Price Action and Stop Hunting methods.
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