XAU/USD – US Dollar strengthening Gold struggling to find support.

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Please note that the analysis presented in the charts below should not be considered investment or trading advice. They are for educational purposes only and you should consider seeking advice from an independent financial advisor.

Chart of the Week – 19th August 2022

Gold - XAU/USD – US Dollar strengthening Gold struggling to find support.

XAUUSD XAU/USD GOLD CHART
Gold daily chart

Chart Analysis

The gold chart shows that the prices are heading down towards the key support level at $1735. However, there is soft support available between $1745 also the meeting point of 50% Fibonacci Level. Prices would also be reaching the cross between the 20 Day SMA (Blue Line) and 50 Day SMA (Red Line) on the chart and this could mean that prices can possibly jump at the Cross. This would take the Gold out of the current short-term downtrend path it is heading on. The RSI indicator shows gold prices have dropped below the mid-50-point level and for any recovery to occur the Bulls need to move the prices above the 50 midpoint RSI. The drop in the prices could find support at $1745 or if not then at the Key support level at $1735 also a confluence zone just above the Fibonacci 61.80% level. US dollar has been strengthening and has resumed its upward recovery and re-entered its ascending Channel after a brief fall out. DXY index could find resistance at the 108.00 level.     

  • Resistance Zone: $1840 to $1860
  • Key Resistance Level: $1808
  • Major Pivot Point: $1765
  • Key Support Level: $1735
  • Support Zone: $1710 to $1790
  • 200 Day SMA – Green Line
  • 50 Day SMA – Red Line
  • 20 Day SMA – Blue Line

Daily Chart Directional bias - 2 Weeks 

Trade Insights – XAUUSD

The chart shows viable Short Positions under the Pivot point of $1765 or current gold prices. Short positions towards the first target of $1745 Support and if prices do not bounce from $1745 support, then further test of Key Support Level at $1735.

The possible entry of Short Trades below the Pivot at $1765 or the current level

Potential first take profit could be at - $1745  

Potential second take profit could be at - $1735

Alternatively, possible Long positions if Gold bounces back from $1745 support also the Fib 50% level on the chart to first test the Major Pivot point at $1765 and then the test of $1780 Resistance and finally the Key Resistance level at $1808.

Possible Entry for Long trades from the Support at $1745 or above the Pivot level at $1765

Potential first take profit could be at - $1765 Pivot

Potential second take profit could be at - $1780 Resistance

Potential third take profit could be at - $1808 Key Resistance Level.

It is important to understand that the analysis is intended for educational purposes only. Traders are encouraged to use their own judgment and analysis when making trading decisions.


1. Identify the Balance Point on the chart – The Balance Point is a level on the chart that represents an equilibrium point between supply and demand. It can serve as a potential entry point for a trade. It’s important for the trader to determine whether the current price is above or below the Balance Point before making any trading decisions.

2.
Wait for the price to approach potential profit levels – After entering a trade, it may be helpful to wait for the price to approach potential profit levels on the chart. These levels can be identified as areas where price reversals have occurred in the past. When the price approaches a potential profit level, it may be time to consider initiating further trades to test the next level of take profit limits.

3. Monitor the trade as the price hovers around the Balance Point – While the price is hovering around the Balance Point, it’s important to monitor the trade and make adjustments as necessary to ensure that it is still in line with market conditions. If market conditions change, it may be best to exit the trade.

4. Determine the market direction – Once a clear market direction has been established, the trader can set the trade with stop loss and take profit limits as they appear on the chart. It may also be helpful to consider using trailing stops to lock in profits and minimize potential losses. To determine the market direction, the trader may use technical analysis and other market indicators.

5. It’s important to remember that technical indicators, including the RSI, are not foolproof and can sometimes provide false signals. Therefore, it’s important to exercise caution when making trading decisions based solely on technical indicators. To make informed trading decisions, it’s recommended to use technical indicators in conjunction with other indicators and analysis

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