XAUUSD: Strong correction, overbought alarm
XAUUSD This Week: Uptrend Continued or Is a Correction Coming?
Faced with the challenging question of XAUUSD's direction this week, we see that gold prices are maintaining a notable bullish streak, reaching $2257 in the early trading hours of the week.
Geopolitical risks still exist and will continue to increase as the US Presidential election approaches. When the Fed begins to reduce interest rates, US government bond yields will go down, making gold an even more attractive haven tool.
The fact that gold prices still withstand challenges from the dollar and US government bond yields is very impressive. This shows that the demand for precious metals is still very large. In the short term, XAUUSD is likely to see a healthy correction to consolidate its upward journey. The relative strength index (RSI) is in an overbought condition signaling a notable correction. If the upward momentum remains well supported, the next recovery points for XAUUSD will be 2222 and 2150 and a retest of the 34.89 EMA. The trend seems to be moving into a consolidation and correction phase, especially when the RSI indicator and candlestick patterns are diverging, showing that purchasing power is gradually decreasing.
Faced with the challenging question of XAUUSD's direction this week, we see that gold prices are maintaining a notable bullish streak, reaching $2257 in the early trading hours of the week.
Geopolitical risks still exist and will continue to increase as the US Presidential election approaches. When the Fed begins to reduce interest rates, US government bond yields will go down, making gold an even more attractive haven tool.
The fact that gold prices still withstand challenges from the dollar and US government bond yields is very impressive. This shows that the demand for precious metals is still very large. In the short term, XAUUSD is likely to see a healthy correction to consolidate its upward journey. The relative strength index (RSI) is in an overbought condition signaling a notable correction. If the upward momentum remains well supported, the next recovery points for XAUUSD will be 2222 and 2150 and a retest of the 34.89 EMA. The trend seems to be moving into a consolidation and correction phase, especially when the RSI indicator and candlestick patterns are diverging, showing that purchasing power is gradually decreasing.
Trade active
Comment:
Trade active
Comment:
Gold stages a correction and trades at around $2,250 after having set a new all-time high above $2,260 at the weekly opening. The benchmark 10-year US Treasury bond yield recovers toward 4.25% and caps XAU/USD upside.
Comment:
Related Ideas
Later on Monday, the US ISM Manufacturing PMI data will be also closely scrutinized for fresh hints on the strength of the US economy, influencing the market’s pricing of the Fed rate cut expectations and, in turn, the non-interest-beating Gold price.