Gold (XAUUSD) Showed a Buying Pressure From the 1910.00 Support Level

Gold (XAUUSD) Showed a Buying Pressure From the 1910.00 Support Level

 Published: March 23rd, 2022

In the latest FOMC meeting, the Federal Reserve raised the interest rate by 0.25% and announced six rate hikes in 2022. Since 2021, the Fed has focused on employment over price stability to maintain stable economic growth that increased inflation to multi-years high. Moreover, in February 2022, the CPI inflation reached 7.9% which is the highest in the last 40 years.

Moreover, in this week's statement, Powell cleared that the Fed is now focused on price stability instead of employment. On the other hand, the rate hike in 2022 is a sign that the stock market may face a negative impact from the stock valuation. Many analysts predict that the multiple rate hikes by quarter percentages are insufficient to recover the economy from the extremely high inflation. In that case, Gold would be a solid alternative investment opportunity to get a cover from the higher interest rates. Moreover, the Ukraine-Russia war is another bullish price driver for Gold where multiple restrictions on Russia might disrupt the global economy.

Let’s see the upcoming price direction from the XAUUSD technical analysis:

XAUUSD Daily Chart

Gold (XAUUSD) Daily Technical Analysis 23rd March 2022

The golden cross in the XAUUSD daily chart has been active from 2019, pushing bulls to face multiple yearly highs. Moreover, the Ukraine-Russia crisis created extreme volatility in the financial market, pushing the Gold to reach the 2070.63 high before showing an immediate rebound. However, the selling pressure from the war-driven sentiment failed to break the 1910.00 key support level. Moreover, the dynamic 50 EMA is below the price with an upside momentum.

Based on the Aroon Indicator, the bearish pressure is still intense where investors should wait for the Aroon Up ( green line) to move above the 50% line before considering it as a buying sentiment. On the other hand, the MACD Histogram is still bearish, where a wait-and-see approach is needed to see the Histogram above the neutral zone.

Based on the daily price structure, the bearish correction is not over. Although the price showed a bullish rejection from the 1910.00 support level, a bullish daily close above the near-term swing high of 1941.00 is needed before going long in this pair. However, the buying sentiment is valid as long as the price trades above the 1900.00 psychological level in the daily chart.

XAUUSD H4 Chart

Gold (XAUUSD) H4 Technical Analysis 23rd March 2022

Although the price is above the 1910.00 key support level in the daily chart, the intraday price shows a different structure. According to the Ichimoku Kinko Hyo, the current price trades below the Cloud resistance where the future cloud is neutral. Although the Senkou Span A is below the Senkou Span B in the future cloud, they are moving in no direction. Moreover, the current price remains closer to Tenkan Sen and Kijun Sen lines, indicating indecision to the price.

The above image shows that the TDI is above the 50 levels and moving up, which is a sign of buying pressure on the price. Investors should monitor how the price breaks out from the symmetrical triangle where any bullish breakout above the 1949.84 level is likely to take the price up towards the 2000.00 area. However, the price trades below the Cloud resistance and bearish pressure from the dynamic Kijun Sen with an H4 candle below the 1910.00 support level may extend the selling pressure towards the 1844.00 area.

XAUUSD H1 Chart

Gold (XAUUSD) H1 Technical Analysis 23rd March 2022

XAUUSD trades within a bearish channel where the most recent price moved above the dynamic 20 EMA with an H1 close in the intraday chart. Moreover, the latest intraday high volume level remains below the current price, indicating buyers' strength in the intraday chart.

In the indicator window, the divergence between the price and MACD line in the indicator window is visible where the dynamic weekly VWAP is below the price. Investors should monitor how the price breaks out from the bearish channel where any bullish H1 close above the channel resistance would open rooms for testing the 2008.00 resistance level. On the other hand, a break below the 1910.00 level with a bearish H1 candle would open new spaces for testing the 1880.00 area.

Should You Try Buying XAUUSD?

Based on the current multi-timeframe analysis, the bullish trend in the XAUUSD price is valid as long as the daily price remains above the 1910.00 key support level. Therefore, investors should closely monitor the intraday price action where the symmetrical breakout should be the trigger point of the possible buying pressure.

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