Technical Analysis – Charts of The Week - Jan 21

XAU/USD

• Resistance Zone: $1865 to $1875 
• Key Resistance Level: $1850 
• Major Pivot Point: $1830 
• Key Support Level: $1800 
• Support Zone: $1787 to 1777 
• 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 $1830, with the target of Key Resistance level at $1850 towards the Resistance Zone of $1865 to $1875 and then targeting the next Resistance Level at $1900 if the uptrend continues. 

Alternatively, Short positions below the Pivot Point at $1830 to test Key Support level at $1800 and then the Support Zone at $1787 to $1777. 

XAUUSD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks XAU/USD

XAU/USD pair jumped above the previous Resistance Zone seen on the chart at $1840. There seems to be more upside is possible as Gold surged almost by $40 after a brief weakness on 18^th January session. Currently it appears the pair is consolidating at $1840 after delivering a long single session green candle. Resistance and Support levels have moved higher compared to our previous gold chart on 23^rd December.  

The Key Resistance level is at $1850 now that is also the November 22 high when Gold dropped almost by $40 from $1849. This Key Resistance level is crucial and could prove difficult for Bulls if the demand fuelled rally must continue any higher. The next Resistance Zone is at $1865 to $1875 that is also the peak of November when on 16^th of the month the gold touched $1875 mark. Daily closing above this resistance zone will bring $1900 mark back in sight.  

The Pivot Point on the chart has also moved higher to $1830 with the jump and Key Support level has moved up to $1800 from earlier $1785 mark. Support Zone has shifted upwards too to $1787 and gradually could move higher as gold surges.    

If the gold drops from the current $1840 level, then the corrective decline could push gold lower toward the $1800 Key Support Level and then could test the $1777 Support Zone.  

The RSI indicator is still holding above the mid-range of 50 points indicating every dip is could be a good buying opportunity on Gold from here on. The Gold is trading above both the 50 Day EMA and $200 EMA levels indicating Strong Bullish Bias of the market.  

Fundamental Overview: Technically the Gold is rising however, rising US Real Yields, and strengthening Dollar could exert downside pressure on Gold. As the Fed could start the interest rate hiking cycle as soon as march, historically the US Dollar rise in the months before the hike and falls months afterward. This means that Gold could face some downside pressure from end of January to March. This also indicates the Peak of Dollar is also not too far away.