XAU/USD: INVESTMENT DEMAND FOR GOLD HAS INCREASED SHARPLY
Scenario Timeframe Weekly Recommendation BUY STOP Entry Point 1953.5 Take Profit 2000.0 Stop Loss 1920.0 Key Levels 1866.0, 1908.0, 1953.0, 2000.0
Alternative scenario Recommendation SELL STOP Entry Point 1907.5 Take Profit 1866.0 Stop Loss 1930.0 Key Levels 1866.0, 1908.0, 1953.0, 2000.0
Current trend
The XAU/USD pair is correcting in an uptrend at the level of 1938.0.
Gold quotes reacted aggressively to the changing geopolitical situation. The escalation of the conflict in the Middle East led to the fact that investors stopped local transactions and switched to real assets. Against this background, the metals market has made a significant upward leap. In addition, gold received a driver for moving away from the USD Index, with which the instrument had an almost perfect inverse correlation of -0.97 points: now this value has changed to -0.32 points and continues to approach parity. Another factor in favor of the growth of the XAU/USD pair may be the beginning of a cycle of interest rate cuts, which the US Federal Reserve is cautiously talking about. On Thursday, the speech of the head of the regulator Jerome Powell will take place, and if there is a clearer hint of easing monetary conditions, gold may become a market favorite.
In turn, a downward correction is being prepared in the bond market: 10-year securities are trading at a rate of 4.830%, anchored at the highs of the year in anticipation of further drivers, and the yield of 3-month bonds is 5.528%, being the highest since 2001 and holding at this level for almost a week. Thus, if the current consolidation leads to a reversal and a further decline in the asset, gold can expect another influx of investors.
Support and resistance
On the D1 chart, the price left the limits of the local descending channel with dynamic borders of 1920.0–1810.0, sharply going beyond the upper limit.
Technical indicators remain in the state of the buy signal that was received at the beginning of the week: the fast EMAs on the Alligator indicator continue to move away from the signal line, expanding the range of fluctuations, and the AO histogram forms new correction bars, being above the transition level.
Support levels: 1908.0, 1866.0.
Resistance levels: 1953.0, 2000.0.
Trading tips
If the local growth of the asset continues and the price consolidates above the local resistance level of 1953.0, long positions with the target of 2000.0 will be relevant. Stop-loss – 1920.0. Implementation period: 7 days and more.
If the asset continues declining locally and the price consolidates below 1908.0, short positions can be opened with the target at 1866.0. Stop-loss – 1930.0.
Scenario | |
---|---|
Timeframe | Weekly |
Recommendation | BUY STOP |
Entry Point | 1953.5 |
Take Profit | 2000.0 |
Stop Loss | 1920.0 |
Key Levels | 1866.0, 1908.0, 1953.0, 2000.0 |
Alternative scenario | |
---|---|
Recommendation | SELL STOP |
Entry Point | 1907.5 |
Take Profit | 1866.0 |
Stop Loss | 1930.0 |
Key Levels | 1866.0, 1908.0, 1953.0, 2000.0 |
Current trend
The XAU/USD pair is correcting in an uptrend at the level of 1938.0.
Gold quotes reacted aggressively to the changing geopolitical situation. The escalation of the conflict in the Middle East led to the fact that investors stopped local transactions and switched to real assets. Against this background, the metals market has made a significant upward leap. In addition, gold received a driver for moving away from the USD Index, with which the instrument had an almost perfect inverse correlation of -0.97 points: now this value has changed to -0.32 points and continues to approach parity. Another factor in favor of the growth of the XAU/USD pair may be the beginning of a cycle of interest rate cuts, which the US Federal Reserve is cautiously talking about. On Thursday, the speech of the head of the regulator Jerome Powell will take place, and if there is a clearer hint of easing monetary conditions, gold may become a market favorite.
In turn, a downward correction is being prepared in the bond market: 10-year securities are trading at a rate of 4.830%, anchored at the highs of the year in anticipation of further drivers, and the yield of 3-month bonds is 5.528%, being the highest since 2001 and holding at this level for almost a week. Thus, if the current consolidation leads to a reversal and a further decline in the asset, gold can expect another influx of investors.
Support and resistance
On the D1 chart, the price left the limits of the local descending channel with dynamic borders of 1920.0–1810.0, sharply going beyond the upper limit.
Technical indicators remain in the state of the buy signal that was received at the beginning of the week: the fast EMAs on the Alligator indicator continue to move away from the signal line, expanding the range of fluctuations, and the AO histogram forms new correction bars, being above the transition level.
Support levels: 1908.0, 1866.0.
Resistance levels: 1953.0, 2000.0.
Trading tips
If the local growth of the asset continues and the price consolidates above the local resistance level of 1953.0, long positions with the target of 2000.0 will be relevant. Stop-loss – 1920.0. Implementation period: 7 days and more.
If the asset continues declining locally and the price consolidates below 1908.0, short positions can be opened with the target at 1866.0. Stop-loss – 1930.0.
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