GOLD BECOMES INDECISIVE – DXY Stuck in Demand Zone.
- Tapping into the 2050s – 2070s, the GOLD meets quite some resistance.
- There is a clear divergence formation on the Gold Daily chart.
- DXY struggling to break out of the 101.75 Demand Area.
- A break below the 50 Day moving average could trigger a long sell. But why will Gold sell, if recession is dancing around the Green Back?
Technical Analysis of XAU/USD – GOLD
The XAU/USD has been attempting to break the 2050/2070 resistance but it keeps getting rejected. Price is currently hanging at no man’s land, hopefully, it falls to the 50-Day Moving Average as a point of dynamic support. If the medium-term buyers are strong enough, Gold could possibly shoot up from the 1958/1965 areas. The short decline to the support area could mean whooping 500pips for traders which is a norm for the gold. If for any reason fundamentally unknown at the moment price breaks the 50 Day Moving Average, the next target point will likely be the 200 Day Moving Average for a gigantic 2000pip swing.
Price is quite far away from the 200-Day MA, which signifies some outlier, and would expect to retrace to find a form of support. The divergence was also confirmed with the first RSI swing as overbought, while the second swing broke into the regular areas and sits at an average of the 50s
In the meantime, if Investors have a negative sentiment about the well-being of the economy and are in panic, they may push some funds into Gold as a safe haven asset.
Economic Release To watch
- The GBP Official Bank Rate.
Gold does not pay any interest or dividends, so when interest rates rise, investors may choose to move their money into interest-bearing assets, such as bonds, instead of gold. This can decrease the demand for gold and cause its price to fall. And vice versa.
The GDP Interest Rate release comes out by 12:30 pm W.A.T
Watch out and Bank in some bucks on Gold
Author: A.A. James
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- GOLD BECOMES INDECISIVE – DXY Stuck in Demand Zone.