XAUUSDBreaking down of DC on 1 hour chart on FOMC night confirms the end of the recent upside movement for XAU, bearish sentiment ticks in immediately after the long waited correction since the steep uptrend started since April.
Looking into Daily,
XAUUSD also breaks DC bottom @ 1845 area and closed around 1811. This further verifies the START of the bearish trend on XAUUSD. The open price yesterday around 1811 was a good entry position if you've missed the 1825 levels where the 0.618 sits exactly. Yesterday's closed around 1768 level also corresponds to the 0.382 which is a significant temp support, though it can still potentially be broken out to the downside further. Bear in mind today's the 3rd day since DC was breached on daily chart 2 days ago, normally once DC is breached on daily it pretty much signals further downside potential and could last days, sometimes a week. Do not expect a sudden reversal upwards unless there's significant news event that contributes to the rise. Thus it is no surprise to expect weakness continuation of
XAUUSD around 1768 -1798 levels in the coming days. At the same time the strong and long lasted ascending support line @ 1735 level extending from 1268 represents the most critical and important support for the XAU bulls to continue the uptrend which started since May 2019.XAU has dropped almost $90oz in the past 2 days, in my opinion the drop is excessive which is mainly driven by the long waited correction, FED's signals to rate hikes sooner than expected further fuel the vertical downfall. However looking into fundamentals macro environment is still pretty much easing with plenty of hot money supply. Inflation is not going to come down within a year or next, which paves the way for further XAU upside. The now expected rate hikes in 2023 has pretty much factored into the recent downfall. From technical point of view I believe 1766-1770 area would provide a temporary support for the past 2 days excessive falls, today I expect price to move up for releasing recent bear powers, but expect heavier bear efforts waiting around 1798 -1800 area seeing
XAUUSD still considers to be in the temp downtrend, which when this level was met, would trigger another downward movement towards 1733-1736 level, and this level my friend, is where I would say a real support can be found - an interception of 0.236 + the long extended ascending support, thus considering long entry at this level, hold for 2-3 weeks for it continue the overall upside breakout.As for now, I wouldn't suggest any long trade consider
XAUUSD is in downtrend correction, instead look for sell limit around 1798 -1800 levels, stop loss $6-8, close half positions with profit @ first target 1770, set stop loss for the remaining positions to $1-2 below entry price level, and let wait for it to fall downwards to hit 2nd target @ 1735 areas. From there you can consider potential reversal with buy limit at the same price, stop loss $6-8. Above just my 2cents and should not in anyway constitute any trading advice, you should understand the risks of leverage trading and trade with your own analysis and view point with care. Any comments welcome and I wish everyone a good trading results!
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.