Stocks, oil, and risk currencies gained on Tuesday as the formal go-ahead for US President-elect Joe Biden to begin his transition burnished a November already boosted by Covid-19 vaccines.
GOLD: correction time
Information is not investment advice
The advance of gold (XAU/USD) this week has been too rapid. The precious metal got overbought. Both on the W1 and H4, the price highs weren’t confirmed by the highs of the Awesome Oscillator. In other words, there was bearish divergence. On the D1, a spike was formed and XAU/USD turned around to the downside and closed at the previous day low thus engulfing Tuesday’s and Monday’s candlesticks. It seems that there’s an interim top and that the correction might take the price further down.
A decline below 1,540 (50-period MA on H4) will open the way down to 1,528 (50% Fibonacci of the November-January advance). The next support will be at 1,509. The major resistance is located at 1,557. The return to this area may once again attract sellers. Only the advance above this point will let the price rise back to 1,577.
EUR/USD fell below 1.1850 after reaching 1.1920 on Monday. The pair consolidated after the initial bearish move.
USD/CAD remains within a downtrend. As a result, selling the pair as it turns down from resistance is the best strategy. Support lies at 1.3125.
Joe Biden will take the post of president of the USA on the morning of 20 January 2021. Trump is going to skip the inauguration. What will be the market reaction? Let’s find out!
Asian equity markets mostly rallied with risk appetite spurred as trade picked up from Monday’s holiday.
Look at the H1 chart for USD/JPY - is it not a perfect example of a reversal in the resistance zone?