XAU/USD Analysis, Bears VS BullsHello everyone, as we all know the market action discounts everything :)
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The Gold Price is still trying to find stability after a huge drop that started on August 5th and went for 5 days, where the market started to move up and stable to power between the Bears and Bulls.
We could be seeing a Tower Top Candlestick pattern forming which is a reversal pattern.
The yellow metal is down nearly 2% since the start of August, with pressure from the US Dollar that is gaining more power and presenting a strong moving wall for prices.
Scenarios for price movement :
Bearish Scenario :
The Market price is being pushed to the support zone at 1778.49 - 1769.39, The bears got a test for power in August and they don't wanna lose it.
The Bears will test the power of the bulls at that support zone and they are going to try to breakout that zone if that breakout happens then we could be seeing another big drop in the gold price reaching the support line at 1715.770.
Bullish Scenario :
Since the market is on its way to the support zone at 1778.49 - 1769.39, The battle between the bears and bulls will play a big role in the market movement for the next period of time, if the Bulls were able to hold the fort and push the bears back then we will see the market price bouncing back up and hitting the resistance line at 1795.490 If the Bulls kept going strong and broke out that line then the price most likely will be going to 1812.50.
Technical indicators showing :
1) Moving averages overall signal is Bearish. where The market is Bellow the 5 20 50 100 200 MA & 20 50 100 200 EMA, but still remains above the 10 MA and 5 10 EMA.
2) The MACD is Below the Zero line showing that the market is in a Bullish state, with a positive crossover between the MACD line and Signal line.
3) The Stoch is giving us a sell signal, with a negative crossover between %K (66.67) and %D (69.21)
Support & Resistance points :
support Resistance
1) 1778.49 1) 1795.49
2) 1769.39 2) 1803.41
3) 1761.48 3) 1812.50
Fundamental point of view :
Gold continued with its two-way price moves on Wednesday and was influenced by a combination of diverging forces. Worries that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery continued lending some support to the safe-haven commodity. However, resurgent US dollar demand acted as a headwind for the dollar-denominated commodity and capped gains. Following a modest intraday dip, the greenback found some support from a goodish rebound in the US Treasury bond yields.
The USD buying picked up pace following the release of FOMC minutes, which indicated that the US central bank could start reducing the pace of bond-buying later this year. The minutes, however, showed that several Fed officials thought that a move to start tapering asset purchases should start next year. Nevertheless, market participants seemed convinced that the Fed is now comfortable to roll back the crisis-era stimulus, which was evident from some follow-through USD strength through the Asian session on Thursday.
This, in turn, was seen as a key factor that dragged the non-yielding yellow metal back closer to weekly lows. That said, persistent COVID-19 jitters held investors from placing any aggressive bearish bets, warranting some caution before confirming that the XAU/USD has topped out in the near term. Traders now look forward to the US economic docket, featuring the release of the Philly Fed Manufacturing Index and the usual Initial Weekly Jobless Claims. The data might influence the USD and provide some impetus to the commodity. According to FXstreet
This is my personal opinion done with technical analysis of the market price and research online from fundamental analysts for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
