Technical Analytics Report

XAU/USD: Fundamental Analysis Report 25 May 2021


Current Trend: Gold Continues Corrective Growth 

Gold quotes correct, currently trading at $1,875 per ounce. The main support for the quotes of the XAU/USD pair was provided by a significant drop in the digital assets sector. Some time ago, analysts called BTC a new alternative to gold for capital protection but in light of recent events and the rapid downtrend of the first cryptocurrency, the metal proved to all skeptics that it is still the best hedging asset. In this regard, the investment position in gold began to grow again. According to the Commodity Futures Trading Commission (CFTC), the number of pure speculative positions on the instrument increased to 198.9K from 192.3K a week earlier and for the first time since February almost reached 200K.

Additional support for the trading instrument is provided by the decline in the debt market: the yield on 10-year American securities has already dropped to 1,600%, although at the end of last week it was 1,700%. 

Support and Resistance 

All signs of a full-fledged trend change appeared on the global chart. The price consolidated above the resistance line, and a Volume candlestick pattern was formed. Technical indicators keep a global buy signal: Alligator indicator’s EMA fluctuations range is still quite wide, and the histogram of the AO oscillator is trading in the positive zone.

·         Resistance levels: 1890.0, 1956.0.

·         Support levels: 1843.0, 1765.0. 

Trading Tips 

After global growth or consolidation above the local maximum around 1890.0, buy positions with the target at 1956.0 are relevant. Stop loss is 1850.0. Implementation period: 7 days or more.

After reversal and decline or consolidation below the local support level of 1843.0, sell positions with the target at 1765.0 are relevant. Stop loss is 1890.0. 

Scenario 

Timeframe: Weekly

Recommendation: Buy Stop

Entry Point: 1890.0

Take Profit: 1956.0

Stop Loss: 1850.0

Key Levels: 1765.0, 1843.0, 1890.0, 1956.0 

Alternative Scenario 

Timeframe: Weekly

Recommendation: Sell Stop

Entry Point: 1843.0

Take Profit: 1765.0

Stop Loss: 1890.0

Key Levels: 1765.0, 1843.0, 1890.0, 1956.0

 

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