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Technical Analysis – Charts of The Week - Dec 24

XAU/USD – Chart shows viable long positions above the Major Pivot Point at $1800, with the target of Key Resistance Level at $1814 and then targeting the next Resistance zone between $1830 to $1840.

XAU/USD

  • Resistance Zone: $1830 to $1840
  • Key Resistance Level: $1814
  • Major Pivot Point: $1800
  • 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 Major Pivot Point at $1800, with the target of Key Resistance Level at $1814 and then targeting the next Resistance zone between $1830 to $1840.

XAUUSD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks XAU/USD

Heading into 2022 XAU/USD pair seems to be recovering the lost ground and is advancing towards the Resistance Zone at $1830 to $1840. The pair has been pushing up against a wall of resistance on the Chart. The bulls are still hopeful of recovery towards $1830 and above that seems realistic. After dropping towards $1750 the support zone on the chart the Gold entered a sharp U-turn recovery to hit $1814 in just 3 sessions. Gold started dropping from the peak of $1876 in mid-November and this retracement continued for 4 weeks when gold touched $1750 and now has managed to rebound above $1800 level.

Gold, at this stage, is poised to move higher towards the Resistance Zone and trading just under the Key Resistance Level of $1814. Long positions are possible still with the target of $1814 first and then $1830 to $1840 Resistance Zone. Surely, many traders would have missed the $1750 to $1770 entry zone that was too quick to catch on. The pair appears to be in its Second Leg higher towards the Resistance Zone at $1830 and trading just above the Pivot point of $1800. If gold drops from this point on, then possible short positions below the Pivot point towards the Key support level at $1777 and then Support Zone at $1755 to $1745.

The prices are trading just above the 50-Day EMA and the 200-day EMA lines now, indicating a Bullish Bias of the market. RSI also looks favourable at around 55 points.

Fundamental Overview: Gold seems to be becoming an alternative to Risk and increasing inflation. But every other week it drops back to Support levels bringing a lot of volatility for gold investors themselves. On Wednesday, the Fed announced that it will double the pace of asset taper to $30 billion per month from mid-January. Investors started to price in a hawkish Federal Reserve policy outlook and gold fell toward the lower limit of its two-week-old range near $1,770 before recovering to hit the $1814 mark. The market is pricing a rate hike as early as March and the 10-year US Treasury bond yield has failed to climb above 1.5% and allowed XAU/USD to reverse its direction. Gold is recovering fast not only because of inflationary pressure but reports suggesting that the coronavirus Omicron variant is much more contagious than the Delta variant. Equity markets also faced heavy losses that sent investors towards Gold to avoid risk. Gold is likely to find demand as a traditional haven for investors during all the uncertainties in the Global Markets.

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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

December 24, 2021

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