Gold spikes after CPI, RSI divergence !!
Hello everyone, as we all know the market action discounts everything :)
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During the Asian session on Thursday, gold experienced some selling, losing a portion of the previous day's big climb to the highest level in roughly a month. The XAU/USD, which is considered a hedge against inflation, benefited after the US CPI report revealed that inflationary pressures had been steadily rising. In light of last Friday's poor NFP print, the data heightened concerns about the return of stagflation. This, together with widespread US currency weakening, provided a significant boost to the dollar-denominated commodity.
A positive RSI divergence has been found as well and it happened after the CPI report yesterday which indicates an increase in value.
Possible Scenarios for the market :
Scenario 1 :
Today started Bearishly but looking at the chart and how the trend is currently trading we might see another push today that will be headed near the first resistance level located at 1805.86 and from there it will push further hitting the major resistance zone starting at 1819.94 where the main battle will happen and the winner will determine the market movement for the next period of time.
Scenario 2 :
The Bears are starting strong today and they will be attempting to drop the market value today after the big rise that happened yesterday, If there were able to keep this momentum today then we will see the market drop, and the first stop will be the support located at 1767.87, in case they broke out that support then they will keep going until they hit the support at 1743.96 where we might witness a bounce back in price.
Technical indicators show :
1) The market is above the 5 10 20 50 MA and EMA indicating a Bullish short-term trend, But still below the 100 and 200 MA and EMA which tells us that the major trend is still looking Bearish.
2) The RSI is at 58.05 showing good strength in the market. a divergence has been seen between the market and the indicator.
3) The ADX is at 19.80 near trending state, With a positive crossover between DI+ (24.46) and DI- (15.79).
Daily Support & Resistance points :
support Resistance
1) 1767.87 1) 1805.86
2) 1743.96 2) 1819.94
3) 1729.88 3) 1843.85
Fundamental point of view :
Wednesday’s rally came after the Labor Department reported that consumer prices in the United States rose by 5.4% in the year to September as rallying commodity markets from oil to coffee kept the pressure up on the world’s largest economy.
On Tuesday, the International Monetary Fund cut its outlook for 2021 world growth to 5.9% from a previous forecast of 6%, saying the momentum for the global economy has weakened while uncertainty has increased.
The IMF is also concerned that surging commodity prices will force central banks into tightening cycles that could trigger selloffs in global equities.
While gold appeared to have a tentative resistance at $1,800, that might not prove to be too difficult to breach if risk aversion runs wild. According to investing
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.
_________________________________Make sure to Like and Follow if you like the idea_________________________________
During the Asian session on Thursday, gold experienced some selling, losing a portion of the previous day's big climb to the highest level in roughly a month. The XAU/USD, which is considered a hedge against inflation, benefited after the US CPI report revealed that inflationary pressures had been steadily rising. In light of last Friday's poor NFP print, the data heightened concerns about the return of stagflation. This, together with widespread US currency weakening, provided a significant boost to the dollar-denominated commodity.
A positive RSI divergence has been found as well and it happened after the CPI report yesterday which indicates an increase in value.
Possible Scenarios for the market :
Scenario 1 :
Today started Bearishly but looking at the chart and how the trend is currently trading we might see another push today that will be headed near the first resistance level located at 1805.86 and from there it will push further hitting the major resistance zone starting at 1819.94 where the main battle will happen and the winner will determine the market movement for the next period of time.
Scenario 2 :
The Bears are starting strong today and they will be attempting to drop the market value today after the big rise that happened yesterday, If there were able to keep this momentum today then we will see the market drop, and the first stop will be the support located at 1767.87, in case they broke out that support then they will keep going until they hit the support at 1743.96 where we might witness a bounce back in price.
Technical indicators show :
1) The market is above the 5 10 20 50 MA and EMA indicating a Bullish short-term trend, But still below the 100 and 200 MA and EMA which tells us that the major trend is still looking Bearish.
2) The RSI is at 58.05 showing good strength in the market. a divergence has been seen between the market and the indicator.
3) The ADX is at 19.80 near trending state, With a positive crossover between DI+ (24.46) and DI- (15.79).
Daily Support & Resistance points :
support Resistance
1) 1767.87 1) 1805.86
2) 1743.96 2) 1819.94
3) 1729.88 3) 1843.85
Fundamental point of view :
Wednesday’s rally came after the Labor Department reported that consumer prices in the United States rose by 5.4% in the year to September as rallying commodity markets from oil to coffee kept the pressure up on the world’s largest economy.
On Tuesday, the International Monetary Fund cut its outlook for 2021 world growth to 5.9% from a previous forecast of 6%, saying the momentum for the global economy has weakened while uncertainty has increased.
The IMF is also concerned that surging commodity prices will force central banks into tightening cycles that could trigger selloffs in global equities.
While gold appeared to have a tentative resistance at $1,800, that might not prove to be too difficult to breach if risk aversion runs wild. According to investing
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.