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FX.co ★ Trading Signal for GOLD (XAU/USD) on May 16-17, 2022: buy above $1,806 ( 61.8% - 5/8 Murray)

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Forex Analysis:::2022-05-16T03:32:44

Trading Signal for GOLD (XAU/USD) on May 16-17, 2022: buy above $1,806 ( 61.8% - 5/8 Murray)

Trading Signal for GOLD (XAU/USD) on May 16-17, 2022: buy above $1,806 ( 61.8% - 5/8 Murray)

Gold bottomed at 1,799 on May 13, the lowest level since early February. It then bounced sharply and quickly found resistance at 1,818.

The yellow metal remains under bearish pressure and is likely to consolidate above 1,800 in the coming days.

Since May 5, gold has been trading within a downtrend channel. The main trend remains bearish below 1,895 (200 EMA) and any recovery could be considered a selling opportunity.

However, gold is likely to begin its rise in the coming days if it manages to remain trading above 1,806 which represents the 61.8% Fibonacci retracement (1,799 - 1,818).

Since Friday of last week, the market sentiment changed to positive. This allowed the US dollar to correct lower and the price of crude oil continued to rise supported by the recovery of the Wall Street indices that closed with gains.

In general, that environment should be positive for gold. It is expected to continue its recovery this week and could reach the 21 SMA at 1,834.

According to the 4-hour chart, we can see that gold is above 5/8 Murray which represents a range zone. A technical bounce around 1,812 could give the bulls a good opportunity to buy gold with a target at 1,834 (21 SMA) which coincides with the top of the downtrend channel.

Additionally, a sharp break of the 21 SMA and a break of the downtrend channel could accelerate the bullish movement of gold and reach the 200 EMA around 1,895.

Our trading plan for the next few hours is to buy above 1,806 (61.8%) or above 1,812 (5/8 Murray), with targets at 1,834 (21 SMA), 1,875 (6/8 Murray), and 1,895 (200 EMA).

The eagle indicator on daily charts is in the oversold zone, and a technical bounce is likely in the next few days.

Analyst InstaForex
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