XAU/USD: the instrument is consolidating 16 February 2021, 09:44

XAU/USD: the instrument is consolidating

16 February 2021, 09:44

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1830.05
Take Profit	1850.00
Stop Loss	1815.00
Key Levels	1784.82, 1800.00, 1810.29, 1830.00, 1850.00, 1863.34, 1875.09

Alternative scenario
Recommendation	SELL STOP
Entry Point	1810.25
Take Profit	1784.82
Stop Loss	1820.00
Key Levels	1784.82, 1800.00, 1810.29, 1830.00, 1850.00, 1863.34, 1875.09

Current trend

Gold prices are showing modest gains today, correcting after a "bearish" start to the week. Analysts associate the fall in the instrument with a further increase in demand for risky assets as the global economy demonstrates recovery trends. Additional pressure on the price of gold was exerted by the yield on US Treasury bonds, which reached its 11-month high yesterday.

Markets are awaiting the final approval of Joe Biden's USD 1.9T economic stimulus program. The fact that Donald Trump, against whom the impeachment proceedings were launched, was acquitted also proved to be a powerful positive factor for the markets. Investors have made sure that Biden is not seeking to get even with his political opponent, and is also determined to provide assistance to the affected economy. US Treasury Secretary Janet Yellen urged the same thing, speaking at the G7 meeting last Friday. The head of the regulator advised not to hesitate with new support measures in order to accelerate the recovery of the global economy after the pandemic.

Support and resistance

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is trying to reverse upwards but preserves its sell signal (located below the signal line). Stochastic is declining more actively, but is rapidly approaching its lows, signaling risks of oversold instrument in the ultra-short term.

Resistance levels: 1830.00, 1850.00, 1863.34, 1875.09.

Support levels: 1810.29, 1800.00, 1784.82.

Trading tips

To open long positions, one can rely on the breakout of 1830.00. Take-profit – 1850.00. Stop-loss – 1815.00. Implementation time: 1-2 days.

The development of "bearish" trend with the breakdown of 1810.29 may become a signal for further sales with target at 1784.82. Stop-loss – 1820.00.