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Analysis and Education>Technical Analysis: XAUUSD

Technical Analysis: XAUUSD

22.09.2022

XAUUSD was prone to fluctuation on Wednesday


On Wednesday, XAUUSD plummeted. It broke below $1660 at one point and then increased by $34. It hit the highest of $1687.99 per ounce and finally increased by 0.5%.


The US Fed hints that the interest rate will be raised on a larger scale


On Wednesday, the US Fed raised the interest rate by 75 basis points for the third straight time, hinting that the interest rate will be raised by at least 75 basis point or at a larger scale this year. The US Fed raised the targeted policy interest rate range to 3.00%-3.25%, the highest since 2008. The latest forecast shows that policy interest rate range is expected to rise to 4.25%-4.50% and to hit the highest of 4.50%-4.75% in 2023.

    

Powell said at the press conference that proactive actions were need, adding that the US Fed’s move may cause slow economic growth and rising unemployment rate.


Gold ETF holdings continued to fall


According to ETF--SPDR Gold Trust, gold holdings decreased by 1.16 tons to 952.16 tons on 21st September. Gold ETF holdings has decreased for the 4th straight trading day.


Technically speaking, the market trend is bearish in the short term


On the chart of the day, XAUUSD was moving below the descending trend line. The market trend is bearish. In terms of technical indicators, KDJ went downwards after death cross occurred, showing that XAUUSD will fall further. XAUUSD will decline further if it rebounds but is capped at the resistance at 1670.


On the 4-hour chart, XAUUSD accelerated falling. The market trend is bearish. In terms of technical indicators, kdj went downwards after death cross occurred, showing that the market trend is bearish. XAUUSD will decline further to the potential support at 1640 if it breaks below 1653.


Key resistance: 1670, 1688

Key support: 1653, 1640


Generally, the US Fed hinted that it would increase the interest rate on a large scale, raising the US dollar to a 20-year high. Gold price may fall further. Investors should focus on BOE interest rate decision and initial jobless claims (during the week ending on 17th September) during the day.

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