XAU/USD analysis 11. July 2020:
Gold is rising for a long time now without a big retracement. The overall bias is still bullish eyeing the current economic situation. But think about this:
We've seen the current situation some times in the past. Think about the IT- bubble in 2000. Stocks where rising at a mind- blowing pace which wasn't healthy, retail traders jumped on the train (see Robinhood traders now). Sooner or later such bubbles have to burst.
Currently the stock market is in the same phase right now. We're facing a recession, the FED's balance sheet is enormous and inflation is waiting around the corner. But as always, the humanity tries to save things, without considering the negative sequences that may come.
So in my opinion the following is happening:
Markets will inflate surpassing ATHs like
NAS100USD
already did. At the same time gold will drop as investors don't see a risk if markets are rocketing.
At a certain point, nobody knows when, this whole bubble is going to burst, catapulting the gold price to new ATHs, crushing the Stock market, to enter a deep depression. Same things keep repeating themselves over and over again...
But for now, the drop in
XAUUSD
could happen already this week.
Price reached a year old resistance at 1800-1818 and is currently consolidating towards the lower end of the rising wedge. We may see some attempts to push this further up but when it breaks this wedge we could be heading to the 1.618 FIB level to 1600 where the daily 200MA is currently sitting.
Peace ✌️
Gold is rising for a long time now without a big retracement. The overall bias is still bullish eyeing the current economic situation. But think about this:
We've seen the current situation some times in the past. Think about the IT- bubble in 2000. Stocks where rising at a mind- blowing pace which wasn't healthy, retail traders jumped on the train (see Robinhood traders now). Sooner or later such bubbles have to burst.
Currently the stock market is in the same phase right now. We're facing a recession, the FED's balance sheet is enormous and inflation is waiting around the corner. But as always, the humanity tries to save things, without considering the negative sequences that may come.
So in my opinion the following is happening:
Markets will inflate surpassing ATHs like
NAS100USD
already did. At the same time gold will drop as investors don't see a risk if markets are rocketing. At a certain point, nobody knows when, this whole bubble is going to burst, catapulting the gold price to new ATHs, crushing the Stock market, to enter a deep depression. Same things keep repeating themselves over and over again...
But for now, the drop in
XAUUSD
could happen already this week. Price reached a year old resistance at 1800-1818 and is currently consolidating towards the lower end of the rising wedge. We may see some attempts to push this further up but when it breaks this wedge we could be heading to the 1.618 FIB level to 1600 where the daily 200MA is currently sitting.
Peace ✌️
But still we are in this rising wedge. Volume is decreasing on the daily chart, so we're still on track to see a bigger move to the downside. Overall Gold will be bullish but a rotation of money will occur in the near term, pushing the dollar up.
Maybe we see a breakout to the upside, which should be considered a fakemove.
Let me know what you think :)