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03.07.21 Technical analysis XAU / USD (gold) – can the situation on gold be reversed during July?

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03.07.21 Technical analysis XAU / USD (gold) - can the situation on gold be reversed during July?
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Since June is over, it is time to look at gold again (XAU / USD) and analyze the monthly chart in this market as well.. The truth is that gold is still holding on, and so far there has not been a deepening of the marked decline that occurred more than two weeks ago. As I said in previous analyzes, the market is a dynamically changing environment.

Nothing here is static, and the reasons why gold spilled may disappear over time. Although the economic projection has changed expectations, depending on new data and information, the market may change its expectations again from day to day. In addition, it is still shown that inflation will continue to rise as inputs to production (oil, copper, etc.) continue to rise in price. Which, logically, must be reflected in price levels.

Current situation at 1M TF XAU / USD (gold)

03.07.21 Technical analysis XAU / USD (gold) - can the situation on gold be reversed during July?

Let’s start with the monthly chart, which looks awful at first glance. Respectively, the March, April and June candles are fine and you can tell by that effort about following up on the previous bull trend. In fact, it is a May candle extremely bullish and could be considered a sure confirmation of the continuation of the uptrend.

But the June candle is a complete tragedy, because it completely engulfed the previous bull candle – the May one. In any case, it is clear that something has gone wrong, so it is appropriate to calculate that gold needs some time to recover.

From a technical and fundamental point of view, gold has received a terrible beating and the market is demanding a healing stay for something like this. We will see how the July candle turns out, because bull signals may already be coming during the current month. And the final shape of the July candle will therefore be very authoritative.

Current situation at 1D TF XAU / USD (gold)

03.07.21 Technical analysis XAU / USD (gold) - can the situation on gold be reversed during July?

As for the daily chart, the yellow metal still holds its position near the S / R level of 1,770 USD / ounce. During the week, there was an attempt to break through support, which ultimately resulted in failure and a fairly quick return to support. Initially, I was of the opinion that the support onslaught would not withstand, because the previous beating was quite overwhelming. Moreover, last trading week, gold was not able to bounce back at all.

However, based on the fresh price action, I would venture to say that the market from below will test the S / R level of 1,830 USD / ounce. Respectively tests the upper edge of the drawn downtrend channel. From a technical point of view, we got two level tests, which ended successfully for the bulls. Moreover, from a fundamental point of view, there is more and more talk about that high inflation is still pounding on the door.

If investors gradually become trusted, at least the $ 1,830 / ounce can test gold in the coming weeks. However, I am quite skeptical that the bulls will have a breakthrough. At the moment, the market will probably not have the strength to do so, unfortunately.

Therefore, until the conditions in the market change significantly for the better, it is rational to count on testing the S / R level of 1,678 USD / ounce. That is, the yellow metal is waiting for another wave down. At the said level, there is a very strong demand and it would help the market significantly.

Indicators

Gold is currently benefiting from the bullish divergence I have noted on the RSI curve. The market reacted almost immediately, which is an objectively good sign. That is why I would be inclined to test the upper edge of the channel. A momentum has been created that can push the price around for some time.

As for the MACD, the indicator is close to the bullish cross. If the signal is fulfilled, the market has another reason to grow after close resistance.

In conclusion

Gold has had a pretty ugly month, which totally broke the previous bull technique of the market. But as I said last time, I would definitely not break a stick over gold. Precious metal still has a chance to make a significant change.

However, it depends on future expectations, which are currently quite influenced by the Federal Reserve Bank. In any case, I am quite skeptical that a major turnaround will come during July. Maybe this year the yellow metal will get somewhere, but I doubt that a few weeks will be enough to gain enough strength.

ATTENTION: No data in the article is an investment board. Before you invest, do your own research and analysis, you always trade only at your own risk. Cryptheory team strongly recommends individual risk considerations!

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.
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