$1779 Persists as Unbreakable Support For Now
farhan fazal
XAUUSD·
Jan 28 2022
Take Profit +2.32%
Holding time 10d23hr
1785.47
Entry price
1826.87
Take profit price
Gold extended the post-FOMC decline and witnessed some follow-through selling for the third successive day on Friday. The bearish pressure remained unabated through the first half of the European session and dragged spot prices to a fresh three-week low, around the $1,790 region.
Apart from this, Friday's downfall could further be attributed to some technical selling on a sustained break below the $1,800 round-figure mark. That said, the prevalent risk-off mood – amid concerns about a potential armed conflict in Ukraine – could hold back bearish traders and limit losses for the safe-haven gold. Traders now eye US macro releases – the Core Personal Consumption Expenditure Price index and revised Michigan Consumer Sentiment Index – for a fresh impetus. Nevertheless, the XAU/USD remains on track to record its worst weekly slide since late November.
From a technical perspective, gold has now confirmed a near-term bearish break below an upward sloping trend-line extending from the August 2021 swing low. This, in turn, supports prospects for a further depreciating move. The negative outlook is reinforced by bearish technical indicators on the daily chart, which are still far from being in the oversold territory. Hence, a subsequent fall towards the $1,785 intermediate support, en-route the $1,770-$1.768 region, remains a distinct possibility.
On the flip side, attempted recovery moves might now confront stiff resistance near the mentioned ascending trend-line support breakpoint, around the $1,798 region. Any further move up could be seen as a selling opportunity and remain capped near the very important 200-day SMA, currently around the $1,805 area. The latter should act as a pivotal point for traders, which if cleared decisively might trigger a short-covering move towards the $1,830-$1,832 static resistance.