At the time of analysis, XAUUSD is consolidating and has broken above key resistance levels. The long trade setup is based on several factors:
Strong Bullish Trend: XAUUSD has been in a strong uptrend over the past several weeks/months, supported by global inflationary fears, potential economic uncertainty, and dovish central bank policies.
Fibonacci Extension and Price Action: Using Fibonacci extensions, the price target of 3067 is derived from the previous swings and the structure of the bullish move. The extension levels indicate that price could extend further upwards toward this key zone.
RSI and Momentum Indicators: The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators are showing signs of continuation, suggesting that the price may continue to rise until it reaches the 3067 zone.
Price Pattern Analysis: There is a potential bullish chart pattern (such as an ascending triangle or a continuation pattern) suggesting further upward momentum. Traders can look to enter the market on pullbacks to support, targeting the 3067 level.
Once the price reaches the 3067 target, technical signals suggest a significant risk of a reversal. The rationale for a short position following the long trade is based on:
Overbought Conditions: At the 3067 zone, price action may become overheated. The RSI could be entering overbought territory, and momentum indicators like the MACD could show signs of divergence, signaling that the uptrend is weakening and a reversal is imminent.
Fibonacci Retracement Levels: After reaching 3067, a significant retracement could take place. The next major support zone lies much lower, potentially around the 2700-2800 range, as indicated by Fibonacci levels.
Bearish Divergence: A bearish divergence between price and indicators could signal that the momentum driving the price up is weakening. As the price struggles to make new highs, this could be a sign of exhaustion.
Potential for a Crash: Gold has historically experienced sharp corrections after strong bullish rallies, often caused by macroeconomic shifts, changes in market sentiment, or a sudden risk-off event. A failure to break above the 3067 zone could trigger a sell-off, with the potential for a significant crash.
Strong Bullish Trend: XAUUSD has been in a strong uptrend over the past several weeks/months, supported by global inflationary fears, potential economic uncertainty, and dovish central bank policies.
Fibonacci Extension and Price Action: Using Fibonacci extensions, the price target of 3067 is derived from the previous swings and the structure of the bullish move. The extension levels indicate that price could extend further upwards toward this key zone.
RSI and Momentum Indicators: The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators are showing signs of continuation, suggesting that the price may continue to rise until it reaches the 3067 zone.
Price Pattern Analysis: There is a potential bullish chart pattern (such as an ascending triangle or a continuation pattern) suggesting further upward momentum. Traders can look to enter the market on pullbacks to support, targeting the 3067 level.
Once the price reaches the 3067 target, technical signals suggest a significant risk of a reversal. The rationale for a short position following the long trade is based on:
Overbought Conditions: At the 3067 zone, price action may become overheated. The RSI could be entering overbought territory, and momentum indicators like the MACD could show signs of divergence, signaling that the uptrend is weakening and a reversal is imminent.
Fibonacci Retracement Levels: After reaching 3067, a significant retracement could take place. The next major support zone lies much lower, potentially around the 2700-2800 range, as indicated by Fibonacci levels.
Bearish Divergence: A bearish divergence between price and indicators could signal that the momentum driving the price up is weakening. As the price struggles to make new highs, this could be a sign of exhaustion.
Potential for a Crash: Gold has historically experienced sharp corrections after strong bullish rallies, often caused by macroeconomic shifts, changes in market sentiment, or a sudden risk-off event. A failure to break above the 3067 zone could trigger a sell-off, with the potential for a significant crash.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.