Harish Shahi
Independent Analyst
Overview: From the last couple of days we are expecting that some neutral to downside signal in the pair where the upside momentum is limited to $1961 level and the downside is limited to $1911 level. So based on the ATR we may say that breakout on either side will give us a new buy or sell signal.
The aggressive traders may go for sell but for a very near term target of $1860 and $1820 only. Gold is looking a bit weak in on the daily along with 4 hourly chart. The way bears are reacting it seems like they are approaching the $1860 level and we may see a further confirmation below the $1900 level which is a psychological level i.e. multi year’s resistance level now converted as a strong support level.
Technical Analysis: From a technical perspective we can see that a parabolic top has been formed on the daily chart which is providing us a bearish signal. A short term downtrend channel has been formed and heading to the downside.
The yellow gold is trading and sustaining below all the major and minor EMA lines on the daily chart and providing us a bearish signal for the time being. The 14-day relative strength index (RSI) seems to have regained downside level and a bearish crossover on the MACD indicator is still favoring the bears on a daily chart which is pushing us to have a bearish view on the gold. Odds are in favor of bears and daily to weekly bias remains bearish on gold as long as $1965 level remains intact. The way gold is trading and moving on the daily chart it seems like $1860 and $1810 level is an unfinished target of bears.
What next: The bears are dominating the bulls leading in the game and playing at the front foot and it seems like bears are going to continue with this game and will dominate the bulls in the near term with full of pace and they are approaching the at $1810 level in coming weeks. The $1860 is made or break level can be considered as key support level followed by $1810 where $1965 is a key resistance level followed by $2000 level.
Trade idea: Based on the chart and study above we would suggest that go for sell at 1920-25 for target of $1870 and $1840 level with strict stop loss of $1970 level.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD retreats below 1.0700 as USD rebounds
EUR/USD lost its traction and retreated slightly below 1.0700 in the American session, erasing its daily gains in the process. Following a bearish opening, the US Dollar holds its ground and limits the pair's upside ahead of the Fed policy meeting later this week.
USD/JPY recovers toward 157.00 following suspected intervention
USD/JPY recovers ground and trades above 156.50 after sliding to 154.50 on what seemed like a Japanese FX intervention. Later this week, the Federal Reserve's policy decisions and US employment data could trigger the next big action.
Gold holds steady above $2,330 to start the week
Gold fluctuates in a relatively tight channel above $2,330 on Monday. The benchmark 10-year US Treasury bond yield corrects lower and helps XAU/USD limit its losses ahead of this week's key Fed policy meeting.
Week Ahead: Bitcoin could surprise investors this week Premium
Two main macroeconomic events this week could attempt to sway the crypto markets. Bitcoin (BTC), which showed strength last week, has slipped into a short-term consolidation.
Five Fundamentals for the week: Fed fears, Nonfarm Payrolls, Middle East promise an explosive week Premium
Higher inflation is set to push Fed Chair Powell and his colleagues to a hawkish decision. Nonfarm Payrolls are set to rock markets, but the ISM Services PMI released immediately afterward could steal the show.