Gold tests resistance zone - Market News and Research - Dukascopy Bank

Thu, 08 Apr 2021 11:33:23 GMT
Source: Dukascopy Bank SA
 

As expected, the yellow metal found support in the 55-hour simple moving average, which pushed the rate into another test of the resistance zone that is located above the 1,745.00 mark.

By the middle of Thursday's GMT trading hours, a test of the resistance zone was ongoing.

Economic Calendar Analysis



Notable events for this week are over. Expect the next week's event analysis to be published during the US trading hours of Thursday.

More detailed analysis for each Trading Ideas section pair is bound to be written in the daily publication on Friday.

XAU/USD short-term forecast

If the 55-hour SMA provides enough support for the price to push through the resistance of the zone above 1.745.00, the metal could test the resistance of the March high level near 1,755.00.

On the other hand, a potential decline of the metal would reach for the combined support of the zone below the 1,725.00 level and the 200-hour simple moving average. However, note that some support could be found in the 100-hour SMA near 1,732.50.

Hourly Chart



On the daily chart, the support zone of the March low levels is not made up only of the recent lows. Research the 2020 March high levels and the 2020 April to June low levels. The zone was providing both resistance and support during last year.

Most recently, on Tuesday, the price passed the resistance line, which kept the metal declining throughout 2021. Namely, the described support zone provided enough support for the metal to break the resistance line.

The surge of the metal should first test the mentioned March high level. Afterwards, the 50.00% Fibonacci retracement level of the 2020 low and high levels at 1,763.74 could provide resistance. In addition, the Fibo was being approached by the 55-day simple moving average.

Daily Candle Chart


Short term traders took profits

Since Tuesday, the sentiment on the Swiss Foreign Exchange was bullish, as 67% of open position volume was long.

Note that the gold sentiment is largely bullish at all times due to long term holders. It is quite rare for it to be below 70%. 

Due to that reason, on Tuesday, it was assumed that short term traders had closed their long positions and probably opened short positions.

Meanwhile, in the 1000-pip range around the metal's price the pending orders were 54% to buy the metal.


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