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Technical Analysis – Charts of The Week

Trade Insights – XAU/USD – Chart shows viable long positions above the Key Support Level at $1777, with the target of Key Resistance Level at $1808 and then targeting the next Resistance zone between $1830 to $1840. Alternatively, Short Positions if prices drop below the Key support Level at $1777 targeting the Support zone between $1755 to $1745.

XAU/USD

  • Resistance Zone: $1830 to $1840
  • Key Resistance Level: $1808
  • Major Pivot Point: $1780
  • Key Support Level: $1777
  • Support Zone: $1755 to 1745
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – XAU/USD – Chart shows viable long positions above the Key Support Level at $1777, with the target of Key Resistance Level at $1808 and then targeting the next Resistance zone between $1830 to $1840.

Alternatively, Short Positions if prices drop below the Key support Level at $1777 targeting the Support zone between $1755 to $1745.

XAU/USD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks XAU/USD

XAU/USD pair has completely reversed its direction after hitting multi week highs at $1877. Due to the bearish pressure and increased supply, gold broke the previous support levels and dropped back under $1800. One of the prime causes of this dramatic turn in gold prices is the rising US treasury bond yields and this has been helping USD to stay strong. Throughout this week Gold has been under pressure due to the rising dollar and one after another major Data events that has crystallised Dollar’s position.   

The Horizontal Channel that we saw sharpening up in Mid-June this year is back on the chart as the Gold has sharply dropped out of the ascending Channel that was seen in our previous analysis. After hitting 70-point level on the RSI indicator the XAU/USD pair has entered a technical correction. However, now it seems gold is consolidating just above the Key support level on the chart at $1777 and we could witness a move higher from here. If gold has found the support here and the buyers return, then the first level of resistance is at $1808. After this the Investors can retest the Resistance Zone at 1830 to 17840.

The prices have now dropped below the 50-Day EMA and the 200-day EMA lines now, indicating Bearish Bias of the market. Interestingly the pullback in the gold prices started with the cross between the two EMA levels on 16th November. If support level at 1777 is broken the prices could head south to test the support zone at $1755 to $1745 and then towards the $1720 support level.

Fundamental Overview: Gold prices are dropping due the rising US treasury bond yields and due to the strengthening dollar. In our previous analysis we showed how the inverse relation between gold and yields works as a driving factor. XAUUSD pair started to retreat as the 10-year yield steadied around 1.6% in the last week. Due to the Thanksgiving holiday in the US Gold prices could continue to fluctuate between the technical levels on the chart.

UKO/USD

  • Resistance Zone: 86.00 to 86.50
  • Key Resistance Level: 84.0
  • Major Pivot Point: 80.90
  • Key Support Level: 78.40
  • Support Zone: 76.50 to 76.00
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – The UKO/USD or Brent Crude Chart shows Viable Long positions above the major Pivot at 80.90 targeting the Key Resistance level at 84.00 and then after consolidations retesting the Resistance zone at 86.00 to 86.50.

Alternatively, Short Positions if prices drop below the pivot point on the chart at 80.90 targeting the Key support level at 78.40 and then with further weakness the Support Zone at 76.50 to 76.00

UKO/USD Daily Chart

Chart Analysis: 

Directional bias: 2 Week UKO/USD

The Current rebound in the UKO/USD pair just above the Key Support level has moved the prices back above the Pivot at 80.90 however it seems Oil might fail to overcome the Key resistance level at 84.00. The rise in the oil prices was the largest one day rise in the past two weeks. This was after the announcement of a plan by the US, China, Japan, India, the UK and South Korea to jointly release strategic oil reserves.

Technical analysis shows that the prices of the oil have peaked at around the resistance zone at 86.00 to 86.50 in the last week and after dropping briefly now retesting the Key resistance level at 84.00. The buyers could take a long position just above the Pivot level at 80.90 to test the initial resistance level. A daily close just above the 84.00 resistance level could stage another attempt at the resistance zone and a move higher towards 86.50.

UKO/USD pair is just trading above the 50 Day EMA and well above the 200 Day EMA levels indicating Bullish bias of the market. If the prices drop below the Pivot, then the Sellers could regain the control and move the prices below the key support level at 78.60. The next level of Support is at 76.50 to 76.00

Fundamental Overview: US, China, Japan, India, the UK, and South Korea have jointly made an announcement of a plan to release strategic oil reserves. Liquidity could thin down in the market due to the Thanksgiving holiday in this week, we also have the release of heavy duty US economic data could create further pressure on the Oil/Dollar pair. This is important as a hawkish tone of the Feds that may cause an upshift in the near-term tightening expectations and a parallel rise in the US Dollar that might further weigh against the oil prices.

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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 25, 2021

  • Reading time: 5 mins
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