Last Friday evening, Gold price suddenly rebounded strongly to the old price area of $1820/oz – $1830/oz. In the beginning European session this Monday, Gold touchs around $1818/oz. This comes from good news about the third stimulus package worth 1,900 billion USD is expected to be approved this week.
The DXY – US Dollar Index, which decreased after news about the economic stimulus package, currently standing at 90.32. DXY is under pressure to decline because of this 3rd stimulus package, after one week of strong increase due to information about economic recovery, along with boosting vaccination and good control of Covid-19 epidemic in countries such as the US, UK, Germany, France, Spain, and Japan.
On the Daily chart, the “triangle” has not been broken, the “triangle” has made by an Uptrend (formed from April 2020) and a Downtrend (formed from August 2020). However, the price band is very narrow, about $40/oz.
On the 4-Hour chart, gold price continues to accumulate at $1810/oz – $1828/oz. There is no any sign of a breakout. (see chart below)
Resistance/Support Analysis (Supply/Demand)
After breaking the support of $1830/oz, gold price continues retesting at the old support zone of $1815/oz. The current support is $1815/oz, which is quite weak. Investors should look for a more reliable trading strategy at the $1790/oz.
Resistance levels are $1875/oz and $1830/oz.
The supports are $1760/oz, $1790/oz and $1815/oz.
The Fibonacci is measured on the daily chart at the 2070/1760 level. After two week with strong fluctuations, the gold price suddenly broke out the Fibonacci 23.6 and went down. This shows that there has appeared a strong factorial to push gold prices down. Right now, Investors should know that, gold price has 2 resistance zones, the first is the fibonacci psychological resistance, the second is the strong support resistance (As I mentioned above).
Moving average MA
On the Daily chart, the EMA20 crossed the SMA50/SMA200 and turned down, creating a short-term sell trend. However, to establish a safe trading strategy, I recommend waiting for an additional sell signal from the SMA50 moving average.
On the 4-hour chart, the EMA20 crossed the SMA50, showing a bearish reversal signal. Both the EMA20/SMA50 moving averages crossed the SMA200 and continued their downtrend.
On the 1-Hour chart, the EMA20 crossed the SMA50 and went down, the SMA50 cut the SMA200 and went down. In the bear market, there are many signals of downtrend on 1-hour chart, set up a sell strategy, focus on price action to make right decisions.
The EMA20 is the blue line on the chart.
The SMA50 is the black line on the chart.
The SMA200 is the red line on the chart.