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Technical Analysis – Charts of The Week

Trade Insights – XAU/USD – Chart shows continue to show viable long positions within the Bullish Parallel channel and above the Major Pivot at $1845, to retest the Key Resistance at $1865 and then after consolidation to break through the Resistance Zone at $1880 to $1890

XAU/USD

  • Resistance Zone: $1880 to $1890
  • Key Resistance Level: $$1865
  • Major Pivot Point: $1780
  • Key Support Level: $1825
  • Support Zone: $1808 to $1800
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – XAU/USD – Chart shows continue to show viable long positions within the Bullish Parallel channel and above the Major Pivot at $1845, to retest the Key Resistance at $1865 and then after consolidation to break through the Resistance Zone at $1880 to $1890

Alternatively, if prices drop back below the Pivot at $1845, then short towards the Key Support at $1825 and targeting the Support Cluster between $1808 to $1800

XAU/USD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks XAU/USD

XAU/USD chart shows the pair has finally advanced through the Horizontal Channel that started in Mid-June this year. The previous resistance levels have turned into support and Gold is now heading towards the Resistance levels that were seen in June this year.

The daily chart shows after dropping out of the bullish channel on 3rd Nov, the XAUUSD pair has not just re-entered the channel but also broken the upper resistance limits briefly. Some traders think that there needs to be an open and close outside channel for it to be a true breakout. For now, all technical signs on the charts are directed towards the north and looks promising for the Bulls, giving more reasons for embracing long positions.

The prices have moved well above the 50-Day EMA and the 200-day EMA lines now indicating full Bullish Bias of the market. It will be interesting to see if this 5-day advance creates a top side weakness and overbought scenario. Supported by the strong 3 White Soldiers bullish pattern the pair could break through the current resistance levels on the chart and for this to happen gold needs to stay above the Pivot point at $1845 and probably move above the upper limit of the parallel channel.

On the other hand, if the support level of the current ascending channel on the chart is broken and prices fall below both the Pivot and Key Support level, then the support zone at $1808 would be able to hold the prices just above the psychological level of $1800.

Fundamental Overview: Gold prices are rising due to the falling US real yields and somewhat due to the weaker dollar. The drop in the yields makes precious metals more appealing. Yesterday was the release of the US Inflation report and as Gold thrives on volatility the developments are looking promising in the near term.  

USD/JPY

  • Resistance Zone: 114.45 to 114.90
  • Major Pivot Point: 112.80
  • Key Support: 111.70
  • Support Zone: 110.80 to 111.70
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – The USD/JPY chart shows Viable Short positions below the Resistance Zone at 114.45 to 114.90, targeting first the Pivot at 112.80 and then the Key Support level at 111.70.

USD/JPY Daily Chart

Chart Analysis: 

Directional bias: 1 Week USD/JPY

USD/JPY pair has charged through all our past resistance zones and has peaked out at 114.70 which is a fresh 20 month high. The previous resistance levels have turned into support and the pair is discovering new resistance levels.

The chart shows the sign of exhaustion at the peak and prices are consolidating just under the Resistance zone at 114.45 to 114.90. USD/JPY rates may continue to fall towards the key support level at 111.70 as US equity markets are experiencing some volatility, which typically goes in hand with Yen strength.

The pair is still trading well above the 50-day EMA and the 200-day EMA level confirming a strong Bullish trend in the near term. However, in the shorter term, the chart indicates the USD/JPY pair could experience some decline from here.

Fundamental Overview: US inflation rate has hit 6.2% YOY (Oct), its highest since 1990. This brings forward the risk of a rate hike by the Fed sooner than later and acceleration is stimulus withdrawal. The Hawkish Narrative in the market has pushed the Dollar (DXY) above the key 94.00 level. If S&P 500 Index is to continue its decline the USD/JPY pair would struggle to advance through the 114.70 high.

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Disclaimer

The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.

Vishal R

November 11, 2021

  • Reading time: 6 mins
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