empty
 
 

14.01.202222:19 Forex Analysis & Reviews: Gold challenges 1,815.57 static support

Gold was falling at the time of writing after failing to approach and reach the 1,831.83 resistance. The yellow metal turned to the downside as the US Dollar started to grow versus its rivals despite the fact that the US reported poor economic figures these days.

As you already know from my analysis, we have a strong negative correlation between XAU/USD and DXY (Dollar Index). Surprisingly or not, Gold dropped despite the US retail sales indicators reporting a strong drop. Also, Industrial Production fell by 0.1% in December, the specialists expected a 0.2% growth.

Gold registered a strong sell-off in the short term only because the Dollar Index was oversold. Still, XAU/USD's drop could be only a temporary one.

XAU/USD drops as DXY rallies

Exchange Rates 14.01.2022 analysis

As you can see on the H4 chart, Gold reached 1,815.57 static support. As long as it stays above it, the yellow metal may resume its growth. The sideways movement could represent only an accumulation before jumping higher.

Technically, the rate retests the first warning line (wl1) which stands as a dynamic support. Actually, at the time of writing, XAU/USD was challenging the confluence area formed at the intersection between the warning line with the 1,815.57 level.

XAU/USD prediction

A valid breakdown through the confluence area may announce a larger downside movement towards the 1,800 psychological level. On the other hand, staying above this area, above the mentioned support levels, XAU/USD could start increasing again. A false breakdown with great separation or a minor consolidation could announce a bullish momentum towards 1,831.83.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Ralph Shedler,
Analytical expert of InstaForex
© 2007-2022
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

Can't speak right now?
Ask your question in the chat.