RLinda ! GOLD-> Channel breakdown. A trap or a trend change?

25 ott 2022

The XAUUSD is up almost 2.5% since Friday, a correction of 1% is formed on Monday, on Tuesday, gold falls to 1638 amid a slight strengthening of the Dollar index. What's going on with the metal futures? Let's find out!


Gold prices are down slightly on Tuesday (almost -0.5%) as the Dollar Index strengthens from the open and compensates for some support given to Gold by expectations of slower interest rate hikes by the U.S. Federal Reserve
Gold is competing with the U.S. Dollar for the role of an asset to use as a hedge for its portfolios, and rising U.S. currency and 10-year U.S. Treasuries are also making gold futures less attractive to investors.


The U.S. Federal Reserve is discussing on the eve of another key rate hike what level they might increase the cost of borrowing, as well as the timing of a slowdown in tightening, many investors and analysts this press release is weighty to build their future strategies, as rumors of a possible Federal Reserve policy easing are already emerging in the market


Analysts believe:

• - Gold has finally found relative stability above $1.600;
  
• - Provided the Dollar Index weakens, we could see the price around 1800-2000 in the long term;
  
• - Subject to a Treasury bond sell-off, an increase to 2000 is expected;
  
• -The dynamics of the gold price will depend on the information and signals from the next Fed meeting about the suspension or continuation of tightening of rates;
  
• - No change in the direction of the Federal Reserve, continued tightening, and higher inflation will send the gold price into a range between $1600-$1500;
  

*Can we consider this a great time to open long-term long positions? - The question is complicated enough.


Important things that can affect the further look of gold in the near future:

• -U.S. GDP statistics;
  
• -Inflation figures;
  
• -European Central Bank meeting.
  
• -The retreat from its yearly highs of 10-year Treasuries
  
• -Gold has increased its interest in a number of Eurasian countries (e.g. Kazakhstan)
  

*I recall that a 75 basis point rate hike is expected


In what case should we expect gold to rise in terms of technical analysis:
Important zones are marked on the chart:

• - Resistance of the global downtrend channel
  
• - The key level of 1676, which, if broken, will determine the further bullish potential
  
• - The global range, testing the support of which opens the road to the price of 1800 dollars
  

* To change the trend into an uptrend, it will not be enough for the price to break through the global price channel. Bulls need to strengthen their positions above the level of 1676, then the next global target in the market will be the area of 1800 dollars


In what case can the fall continue?
*From the point of view of technical analysis
If the price continues to move in the downward price channel, the liquidity zone and the support level of 1621 will be important for it. The reaction to the level can be different: a rebound, a false-break and a pullback, consolidation above or below the level.
BUT! A break-down of the level of 1621 and consolidation of bearish positions under the level (in the short zone) will open a further potential for a fall towards 1500.


On the local chart the situation is shaping up interestingly enough, but at the moment it is worth waiting for an exact price reaction on any of the mentioned elements!

On the chart the technical pullback to the previously broken support level of 1642, which is in the key zone at the moment, as:

• 1) at its true breakdown, price could fall to the 1622 level - which is a stalemate at the moment
  
• 2) the price can make a false break-down of 1642, which will bring about the strongest momentum
  

Why is the 1622 level important?
If the price goes back to the retest of this level, the gold will enter a difficult zone and in the break-down of this level the residual liquidity, which was tested earlier, is below it, which means that in case of a retest and break-down the price can activate all the remaining orders and the market pressure will only accelerate the fall speed, which will make us see the testing of 1574 in the nearest future.

Regards to R. Linda!

26 ott 2022

Trade attivo

+323 pips! and +1.97% movement in our direction!!!

Great, we correctly identified the key level of 1642.46 relative to which the price made a false break and made an excellent movement in the last few hours!