Technical analysis update: XAUUSD (5th October 2021)
XAUUSD currently trades above its short-term support near 1750 USD. It experienced several fake breakouts below this level, however, price retraced back above support each time. We think inability of gold to slump lower while having bearish technicals suggest that we are close to the bottom. We continue to maintain notion that gold will remain stuck between 1750 USD and 1840 USD for indefinite amount of time with occasional breakouts below and above this price zone. Overall we remain bullish on gold in long run and we expect eventual breakout above 1840 USD followed by resumption of uptrend.
Technical analysis
RSI has bullish structure but it is reversing at the moment and becoming neutral. MACD is in the bearish area and it strives to reverse into bullish direction. We will observe it closely for next two weeks and we will look for crossover into bullish zone. This would further bolster bullish case for XAUUSD. Stochastic points into bullish direction, however, it oscillates below 50 points. We would like to see further rise in Stochastic which would even more bolster bullish thesis for gold. ADX's contains value slightly below 22 points which suggests that trend is either weak or neutral. Despite mixed technical analysis we remain bullish on gold. We believe that fundamentals such as persisting high inflation and unprecedented money printing will start to drag gold higher from here.
We observe inverted head and shoulders pattern forming on daily time frame. Chart formation is depicted below.
Pattern will become valid once neckline is penetrated to the upside. We expect such phenomenon to be accompanied by resumption of bullish trend of higher degree.
Support and resistance
Short-term support sits at 1750 USD while short-term resistance appears near 1840 USD. Medium-term resistance lies at 1916 USD and major resistance sits at all time high near 2075 USD. Major support sits near 1675 USD.
Disclaimer: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.
Technical analysis
RSI has bullish structure but it is reversing at the moment and becoming neutral. MACD is in the bearish area and it strives to reverse into bullish direction. We will observe it closely for next two weeks and we will look for crossover into bullish zone. This would further bolster bullish case for XAUUSD. Stochastic points into bullish direction, however, it oscillates below 50 points. We would like to see further rise in Stochastic which would even more bolster bullish thesis for gold. ADX's contains value slightly below 22 points which suggests that trend is either weak or neutral. Despite mixed technical analysis we remain bullish on gold. We believe that fundamentals such as persisting high inflation and unprecedented money printing will start to drag gold higher from here.
We observe inverted head and shoulders pattern forming on daily time frame. Chart formation is depicted below.
Support and resistance
Short-term support sits at 1750 USD while short-term resistance appears near 1840 USD. Medium-term resistance lies at 1916 USD and major resistance sits at all time high near 2075 USD. Major support sits near 1675 USD.
Disclaimer: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.
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