XAU/USD: gold retreats from record lows 22 February 2021, 09:40

XAU/USD: gold retreats from record lows

22 February 2021, 09:40

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1800.05
Take Profit	1830.00
Stop Loss	1785.00
Key Levels	1720.00, 1735.13, 1753.57, 1769.59, 1800.00, 1810.29, 1830.00, 1850.00

Alternative scenario
Recommendation	SELL STOP
Entry Point	1769.55
Take Profit	1735.13
Stop Loss	1785.00
Key Levels	1720.00, 1735.13, 1753.57, 1769.59, 1800.00, 1810.29, 1830.00, 1850.00

Current trend

Gold prices are showing a slight increase during today's trading, developing a corrective impetus that formed at the end of last week. Last Friday, the instrument renewed record lows since early July 2020, but was able to recover due to corrective sentiment in the market and weak positions in USD, which remained under pressure from weak data on the US labor market.

In turn, the general excitement in the market is putting strong pressure on the position of "safe" gold. High yield on US Treasury bonds provokes further growth in demand for risky assets. The improvement of the epidemiological situation in the USA and in the world also helps. Countries are gradually lifting the quarantine restrictions as vaccination campaigns spread and accelerate.

Support and resistance

Bollinger Bands in D1 chart demonstrate a weak downtrend. The price range is changing slightly, but remains rather spacious for the current level of activity in the market. MACD has reversed upwards preserving a sell signal (located below the signal line). Stochastic is acting more aggressively and, having demonstrated a rebound from the lows, is currently signaling in favor of the development of uptrend in the nearest future.

A full-fledged correctional growth is possible in the short and/or ultra-short term.

Resistance levels: 1800.00, 1810.29, 1830.00, 1850.00.

Support levels: 1769.59, 1753.57, 1735.13, 1720.00.

Trading tips

To open long positions, one can rely on the breakout of 1800.00. Take-profit – 1830.00. Stop-loss – 1785.00. Implementation time: 1-2 days.

The return of "bearish" trend with the breakdown of 1769.59 may become a signal for new sales with the target at 1735.13. Stop-loss – 1785.00.