Gold weekly update 20-24.02

18 thg 2, 2023

On Firday I called a reversal, and price moved exactly I thought, even a bit higher .

"
today we have all confirmations for reversal:
1) monthly LQ was taken
2) there is only one week to the end of the month
3) friday very often price reverse
4) gold moved very much at the end of the trend - big chance for exhaustion
4)surprise big movement at the Asia, when a reversal from the channel was expected
5)LQ from the channel was taken
"

Sell side liquidity is completely cleared, now is time to target the buy side.

Sell side LQ
1) Monthly LQ - gap and imbalanced candle
2) The bearish channel was broken and took the channel traders out
3) Support and resistance traders - LQ from 1830 area
4) Fundamental traders, who are selling based on Inflationary data
5) Swing traders, who bought on Thursday

In my opinion Gold will go up at least to the area I marked, but because of the strong daily bullish reversal it may go further to 1880.

On the charts below, you will see that I am expecting a retracement to 1850-1880, but the main trend for now remain bearish.


Macroeconomics

Last few economic reports showed that inflation is stopping with the decline and probably will go high again - CPI, PPI, Retail Sales, NFP...

May FED increase the IR more than 25pbs?
It is possible, but the next FOMC meeting is far away and the market will use this time to go up.


Top Down Analysis



Gold is moving in a bearish channel and on higher TFs price is still bearish. Thats why we have to watch out, when Gold reach the upper band of the channel.


Benchmark



This chart is showing that Gold is still on down trend and for major reversal is too early, but the price is showing small bullish momentum.


COT Reports





It seems that the professional traders are neutral for now.


Yields



Yields are in consolidation. They just reached the upper side of the consolidation and were rejected. It seems that they will decline at least for a while.


XAUUSD vs GDX



There was a divergence on Friday. It seems that XAUUSD is more affected by the Yields. Thats why the bullish reversal could be only temporary.


Gold vs Silver



We already discussed that sell side liquidity was taken. I am expecting the target to be the buy side channel liquidity.


Elliot Wave



Price is moving as the marked path. Lets see what pattern will create this week for more clarity.


Volume Spread Analysis



For now the bullish moves are confirmed by the volume.

The volume analysis also showing that the bullish volume is much lower than bearish, so expect a pullback and also we may expect the pullback to reach the POC zone at 1880.
The main trend remain bearish for now.


Retail Support and Resistance



We may see a pullback to the 1880 area.


Momentum



On daily TM the momentum is definitely bearish and there are no signs of reversal.
RSI also have more room to decline.



On 4H price is oversold and RSI is showing multiple divergences. Divergences are normal when price is moving in a channel, but somewhen price should retrace. I think that now is the time for a retracement.


Last week analysis