XAU/USD: technical analysis and trading recommendations_05/23/2022

 
 
 
 
 
 
 
XAU/USD H1 Chart

As we noted above, at the time of publication of this article, the XAU/USD pair is traded near the 1845.00 mark, below the important resistance levels 1873.00 (EMA200 on the 4-hour chart), 1867.00 (EMA144 on the daily chart), 1856.00 (EMA200 on the daily chart), showing tendency to further decline.

XAU/USD H4 Chart

It seems that when evaluating the possibility of investing in gold, investors put the policy of the Fed in the first place, relegating geopolitical and inflationary risks to the background.

XAU/USD D Chart

However, the situation may again turn in favor of gold buyers. Despite the slowdown in inflation in the US in April (for the first time in several months), it still remains high, well above the Fed's target level of 2%, and the worsening economic conditions and the collapse of stock markets, increased geopolitical tensions in Europe will provide additional support to gold quotes, while (by Powell's own admission) the market has already largely priced in the upcoming two 0.50% rate hikes.

XAU/USD W Chart

However, as long as XAU/USD is below the above pointed resistance levels, the downtrend prevails.

A breakdown of the support level 1832.00 (Fibonacci 23.6% of the correction to the growth wave since December 2015 and the level 1050.00) will confirm our assumption of further decline. A breakdown of the support levels 1800.00, 1785.00 will push XAU/USD to further decline towards the key support levels 1739.00, 1700.00. The breakdown of the support level 1682.00 (EMA200 on the weekly chart and the Fibonacci level 38.2%) will finally break the long-term bullish trend of XAU/USD.

In an alternative scenario, a breakdown of the resistance levels 1867.00, 1873.00, 1881.00 (EMA50 on the daily chart) will return XAU/USD to the long-term bull market zone.

Support levels: 1832.00, 1800.00, 1785.00, 1739.00, 1700.00, 1682.00

Resistance levels: 1846.00, 1856.00, 1867.00, 1873.00, 1881.00, 1900.00, 1918.00, 1958.00, 2000.00, 2070.00, 2075.00

Trading recommendations

Sell Stop 1838.00. Stop Loss 1858.00. Take-Profit 1832.00, 1800.00, 1785.00, 1739.00, 1700.00, 1682.00

Buy Stop 1858.00. Stop Loss 1838.00. Take-Profit 1867.00, 1873.00, 1881.00, 1900.00, 1918.00, 1958.00, 2000.00, 2070.00, 2075.00