General analysis XAUUSD for 09.03.2022
Current dynamics
Yesterday, gold prices approached at historical maximum. The last time XAUUSD traded this high was in 2020, 5 months after the start of the pandemic.Today the trading instrument is declining, testing the strong psychological level of 2000. After reaching a multi-month high on Tuesday, market participants were cautious and recorded a large volume of long positions. Part of the catalyst for the mass exits was an increase in treasury yields. In addition the withdrawal of Russian oil from the US economy has provoked investors' appetite for risky assets, which is confirmed by the strengthening of Pacific Rim currencies as well as EUR and GBP.Fundamental factors point to further gains in the metals market. The conflict in Ukraine is keeping gold as a safe haven asset. In addition, rising energy prices are adding to price pressures in the global economy. The US is ready to test its energy independence by refusing Russian oil. At the same time, the cost of producing shale oil in the United States is much higher than that of OPEC+. Fuel will continue to rise in price, contributing to inflation. The Fed has to act aggressively in this regard, but market participants perceive next week's key rate hike as a fait accompli.Now, after the declines triggered by the closing of long positions, gold is likely to go back under bullish control. Investizo expects XAUUSD to update its historical highs within 1-2 weeks.
Important statistics will be released today at 17:00 (GMT+2) on the US labor market. Tomorrow is the Eurozone Leaders Summit and the ECB will announce its monetary policy plans.
Support and resistance levels
On the 4-hour chart, the instrument is falling in bottom of the Bollinger Bands. The key support is the moving average of the indicator. The indicator is pointing upwards and the price range has contracted, indicating that the downtrend is about to change to an uptrend. Histogram of MACD is in the positive zone, preserving a buy signal. Stochastic is approaching the oversold area from above, a strong buy signal could be formed within 1-2 days.
- Support levels: 1940.20, 1951.55, 1973.95, 1995.70, 2010.70.
- Resistance levels: 2025.67, 2044.40, 2064.65.
Trading scenarios
- Long positions can be opened at the current price with a target of 2050.50 and a stop loss at 1993.90. Implementation period: 1-2 days.
- Short positions should be opened below 1995.40 with a target of 1975.00 and stop-loss at 1913.10. Implementation period: 1-2 days.