Will XAUUSD Reverse its course?

25 thg 9, 2023

The price of gold remains above $1,920 during Monday's Asian session, and this is encouraging. It appears to be reversing the negative trend thanks to the slowdown in intraday gains of the US dollar (USD), likely due to the decline in US Treasury yields. Currently, the price of gold is still below the critical resistance at $1,926, where the 21 and 200-day moving averages (DMA) are located. On Friday, there was an attempt to surpass this resistance by touching the 50-day moving average at $1,929, but the price did not confirm. The 14-day Relative Strength Index (RSI) has dropped below 50, indicating a persistent bearish sentiment.

The current support is at $1,914, followed by the psychological level of $1,910. For an upward reversal, it is essential to surpass $1,926 and aim for $1,941. However, negative risk sentiment and uncertainties related to the Chinese property market are impacting our optimism. The Federal Reserve continues to support rate hikes, and this cautionary influence affects investor behavior. Overall, the stable dollar and higher US Treasury bond yields are exerting downward pressure on gold.

Looking ahead, the outlook will depend on risk sentiment, dollar actions, and bond yields. Personally, I am looking forward to a bounce on the H4 bullish trendline at $1,916, carefully considering a possible entry for an upward move towards the target swing high at $1,928.

Happy trading to all!

Nicola
CEO of Forex48 Trading Academy