Gold - Odds of bullish breakout are increasing

9 февр. 2022 г.

Gold keeps holding up pretty well despite the prospect of upcoming rate hikes in 2022. It continues its choppy price action within the neutral zone between 1750 USD and 1835 USD. At the moment, it trades slightly below the upper bound of the neutral zone which increases odds of yet another bullish breakout. We noted previously that we expected such breakout to be accompanied by resumption of the uptrend. However, previous breakouts became invalidated shortly after their occurrence took place. Because of that we will pay close attention to price action and we will reassess the situation as developments move forward.

Illustration 1.01

Picture above shows the daily chart of XAUUSD. It also shows the price which has returned back into the upward moving channel. This is bullish development.

Technical analysis - daily time frame
RSI and Stochastic are bullish. MACD is bullish too. Same applies to DM+ and DM-. ADX contains low value which signals that no trend is currently present. Overall, the daily time frame is bullish. However, lack of suggests that price action will continue to be choppy until breakout above the neutral zone or below it takes place.

Illustration 1.02

Picture above depicts the daily chart of XAUUSD and its previous false breakouts and invalidations. We will observe whether gold will manage to break above the resistance at 1835 USD without being invalidated shortly after.

Technical analysis - weekly time frame
RSI and Stochastic are neutral. MACD is bullish. DM+ and DM- are mixed with ADX suggesting the presence of the neutral trend. Overall, the weekly time frame is neutral.

Support and resistance
Main resistance lies at the upper bound of the neutral zone (1835 USD) while main support sits at its lower bound (1750 USD). Other important resistance levels can be found at 1850 USD, 1877 USD, 1916 USD. Other important support levels can be found at 1725 USD, 1700 USD and 1676 USD.

Please feel free to express your own ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.

9 февр. 2022 г.

Сделка активна

Gold broke slightly above the upper bound of the neutral zone. Now we will watch whether it manages to hold there without being invalidated.

10 февр. 2022 г.

Сделка активна

Invalidation of the breakout occurs again.