XAU/USD: Bulls got strong support from level $1770 forming double bottom pattern.

General overview: pair got a strong pullback in gold prices was on the back of rising open interest and volume, opening the door to the continuation of the downtrend in the very near-term. Gold witnessed some heavy selling on Tuesday and dived to levels below the $1800 mark. The risk-on mood, surging US bond yields, resurgent USD demand contributed to the slide. Bears await a break below monthly swing lows, around the $1768 before the next leg down. The gold shows its major downside movement in the chart. The progress on COVID-19 vaccine rollouts and the slowing pace of infections has been fueling optimism over a quick global economic recovery from the pandemic. This, along with expectations for a massive us fiscal spending plan, continued boosting investors’ confidence and was seen as one of the key factors that undermined demand for the safe-haven precious metal.

Technical analysis: From the technical point of view we can say that market extends overnight and get a major bounce in the market. The Technical Confluences Indicator shows that gold has managed to recover ground above the powerful resistance now support at $1781.The pair started heading towards the north side direction and create buy signals for the time while. The XAU bulls shown recovery need a sustained move above the latter to strengthen recovery and creating a strong bullish momentum in the market. On the 4 hourly charts, we can see that market makes a bullish pathway and creates the buy sign. The markets is forming the rounding top and give breakout at level $1769, hopefully, get the bounce from this level and further get strong buying and create buy signals. We can expect the buy level around $1780. It is a tough time for the bulls to maintain their bullishness in the market. The hourly chart shows a bullish divergence of the Relative Strength Index, which occurs when an indicator forms higher lows, contradicting lower lows on the price chart. support is 1757 followed by 1732 and resistance is 1808 followed by 1833.

Trade idea: Our investors buy at level $1780 and the target will be 1805 and 1820 , stop loss will be 1740.

 

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