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Market Analysis

Technical analysis of XAUUSD

June 28, 2019
BY Michael Stark

Gold-dollar (XAUUSD) hasn’t moved significantly upward this week, with price entering what seems to be an accumulation or perhaps distribution phase. Next week’s most important resistance will probably be the recent high around 1437. Support meanwhile is likely to be around the important psychological area of 1400. Low support is unclear; however, it’s possible that the source of last week’s strong upward movement around 1340 could be important.

Technical indicators on XAUUSD H4

Moving averages in their usual combination give a strong buy signal. Price is currently touching the 20-period SMA from Bands, having failed to break much below this area yesterday. We can clearly see the strong movement of the 50 SMA above its 100 and 200-period counterparts. Probably the most important support from MAs is the area of 1400. Apart from its psychological character, this zone also meets the lower deviation of Bands at the time of writing.

Bollinger Bands (20, 0, 2) haven’t contracted much from last week’s strong gains. This means that we would expect volatility to remain fairly high as compared with the first half of June. The slow stochastic (15, 5, 5) meanwhile continues to suggest a buy signal. After the upward crossover in oversold of the main and signal lines last night server time, the main line has extended quite strongly. Conversely, MACD is less clear: the histogram slightly below the signal line suggests a weak sell signal. Other indicators though with their consensus of a buy signal mean that one might disregard information from MACD at present.

Price action and Fibonacci

Recent price action on XAUUSD H4 suggests a possible buy signal. However, recent periods clearly signal lower momentum. There was no immediate resumption of the strong uptrend after Wednesday morning’s upward engulfing pattern. Lows near 1400 yesterday morning came before a dragonfly doji.

The Fibonacci retracement lines here come from the latest large upward movement starting in the second half of last week. We can see that the 38.2% retracement is an important area based on movements this week. This would be especially true if this zone coincides with the lower deviation of Bands and the 50-period SMA next week. It’s also possible that 23.6 Fibo could be a pivot, but confirmation should be sought from completion of at least the current period.

Technical analysis XAUUSD: summary

In general, technical indicators on H4 XAUUSD suggest a fairly weak buy signal. That said, traders should also consider higher timeframes. Overbought conditions on the daily chart mean that this is probably not a good point of entry for buyers. While fundamentals are unlikely to have a strong effect on this symbol until Monday afternoon GMT, nonetheless traders should not ignore American economic data this afternoon.

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