23.05.202205:05 Forex Analysis & Reviews: Trading Signal for Gold (XAU/USD) on May 23-24, 2022: sell in case of pullback at 1,862 (top uptrend channel)

Exchange Rates 23.05.2022 analysis

In the early Asian session, Gold (XAU/USD) is trading above the 21 SMA and above the 200 EMA with a bullish bias and within a trend channel formed on May 13.

Gold is recovering and showing an upward trend in the short term. The yellow metal is receiving support from a resurgence of risk appetite reflected in equity markets as well as from lower US Treasury yields.

Apart from this, concerns about weakening global economic growth benefited the XAU/USD safe-haven and helped the gold price recover from the low of 1,786 reached on May 16.

The 1-hour chart suggests that XAU/USD could continue to recover, although the bullish outlook remains limited as the top of the bullish channel is located around 1,860.

According to the 4-hour chart, gold has strong resistance around 1,877 and at 4/8 Murray located at 1,875. If the upward trend continues in the next few hours, this area is likely to act as a barrier that prevents the advance of gold.

If gold reaches the resistance of 1,875 in the next few hours, it will be an opportunity to sell with targets at 1,850 and 1,836.

Since May 20, the eagle indicator has reached the 95-point zone which represents the extremely overbought market. If gold reaches the top of the uptrend channel around 1,862 in the next few hours, it will be an opportunity to sell below this level.

In case gold breaks below the 21 SMA located at 1,843, it is likely to continue its downward movement and could reach the bottom of the uptrend channel around 1,828 and will be considered a buying opportunity.

Our trading plan for the next few hours below 1,862 is to sell or wait for a technical bounce at 1,828 to buy. The eagle indicator is giving a negative signal and exhaustion, it is likely that there will be a fall in gold in the coming days.

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

Dimitrios Zappas,
Analytical expert of InstaForex
© 2007-2022
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