XAU/USD: gold is in demand again 20 January 2021, 10:08

 

XAU/USD: gold is in demand again

20 January 2021, 10:08

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1863.40
Take Profit	1900.00
Stop Loss	1840.00
Key Levels	1800.00, 1811.96, 1830.00, 1850.00, 1863.34, 1875.09, 1900.00

Alternative scenario
Recommendation	SELL STOP
Entry Point	1849.95
Take Profit	1811.96
Stop Loss	1870.00
Key Levels	1800.00, 1811.96, 1830.00, 1850.00, 1863.34, 1875.09, 1900.00

Current trend

Gold prices are rising significantly during today's Asian session, updating local highs of January 15. The instrument is testing the level of 1850.00 for a breakout. Noticeable pressure on USD was exerted by the speech of the candidate for the post of the US Treasury Secretary Janet Yellen, who spoke in favor of a gradual return of the "strong dollar policy". In any case, it seems that the Joe Biden administration will not engage in artificial weakening of the national currency, as well as prosecute other countries for such actions. In addition, investors are looking forward to Biden's inauguration today, and also expect quick decisions on the announced USD 2 trillion support package for the US economy.

Support and resistance

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range expands from below, weakly reacting to the appearance of ambiguous trading dynamics in the nearest future. MACD is reversing to growth forming a new buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought instrument in the ultra-short term. Technical indicators do not contradict the further development of the uptrend in the short and/or ultra-short term.

Resistance levels: 1850.00, 1863.34, 1875.09, 1900.00.

Support levels: 1830.00, 1811.96, 1800.00.

Trading tips

To open long positions, one can rely on the breakout of 1863.34. Take-profit – 1900.00. Stop-loss – 1840.00. Implementation time: 2-3 days.

A rebound from 1863.34 as from resistance followed by a breakdown of 1850.00 may become a signal for new sales with the target at 1811.96. Stop-loss – 1870.00.