Chapter 17 XAUUSD: Volatile at Lows Now, Waiting for an Opportunity to Long（8.9）
Fundamentals
Spot gold oscillated upward during the Asian session on Wednesday, August 9, and it is currently trading near 1928. With few data overnight, gold prices continued to fall while the dollar index rose because Fed officials' speeches increased the rate hike expectations and the safe-haven demand for dollar increased, weighing on gold prices. But there are also good signs. U.S. bond yields continue to weaken, so there may be some safe-haven buying in the gold market. Gold bulls still have some opportunities. In addition, the market will just wait and see before the U.S. releases its July CPI data on Thursday, which may limit the trading space of the gold. However, the downside of gold prices will also be limited before the release of the U.S. CPI data. Overall, XAUUSD will fluctuate.
Data: U.S. trade deficit was $65.5 billion in June, lower than the expected deficit of 65 billion and higher than the previous deficit of $69 billion.
Today's focus: mainly crude oil stock data and tomorrow's U.S. CPI data.
Technical Analysis
In the 1D timeframe, gold stayed weak on Tuesday and once fell quickly but not by much, with the lowest at $1922. It seemed to have broken below the previous low of 1925, but it was just a test, and finally gold closed around 1925. As last week's August non-farm payrolls data was bullish, gold prices rose. But they dropped slowly this Monday and Tuesday, basically engulfing the previous rise. Gold again returned to a weak pattern, closing with bear candles in the daily chart. At present, XAUUSD sits below the SMAs, temporarily in a weak pattern. But investors are not recommended to keep shorting recently. The gold price will be in a downward channel in the short term. Last night, it hit the lower edge of the channel at 1922 and then moved up. We need to pay attention to the resistance of the 5-day moving average at 1933. If gold prices remain below 1933 in the Asian session, we can be bearish on it and go short, targeting 1922. If the price can rebound and stabilize at 1933, investors can buy XAUUSD in the European and U.S. sessions, with target of the 10-day moving average at 1942.
As for intraday trading, though gold is overall bearish, bears are mainly dominated by their emotion, so investors are not recommended to follow going short but to buy low. If the price retraces to 1924, traders can buy the pair with a small position. The stop loss can be set at 1921, and the take-profit set at 1942 where we can reduce the position size and move the stop loss to breakeven. The second target can be set at 1953.
Trading Recommendations
Trading direction: Long
Entry price: 1924
Target price: 1945
Stop loss: 1920
Support: 1922.000, 1919.000
Resistance: 1933.000, 1942.000
