In technical terms, following the 5-week rally on Gold, a sustained drop below the 23.6% Fibonacci retracement level of the recent rally from February to April indicates a potential further decline in the short term. However, caution is advised for bearish traders as oscillators on the daily chart are still positive, albeit losing momentum. Waiting for confirmation with a break below the $2,300 level is advisable before anticipating deeper losses, possibly to around $2,260-2,255 or even $2,225, before finding support at $2,200-2,190.
XAUUSD – D1 Timeframe
As usual, our analysis of XAUUSD begins from the higher timeframe; which in this case is the Daily timeframe. On the Daily timeframe of XAUUSD, we see price currently trading within the vicinity of a demand zone, the demand zone itself falling within the optimal region of the Fibonacci retracement level.
XAUUSD – H1 Timeframe
The 1-hour timeframe of XAUUSD presents us a price action that is currently forming in waves, and appears to be setting up for a change-of-character (ChoCh). It is thus my expectation that price would break above the highlighted high before I can settle into a bullish order. In the meantime, however, my fingers are crossed as I patiently await the change-of-character.
Analyst’s Expectations:
Direction: Bullish
Target: $2,392
Invalidation: $2,279
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
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