Gold Failed to Break Above $1750 as Investors Concerns About COVID-19

Gold has recently become quite volatile and broke below $1750 after giving a bullish fake-out. XAUUSD failed to break above $1750 area as investors were concerned about COVID-19 pandemic’s second wave. Can Gold recover further? What are the charts and technical indicators are saying? Read more to find further insights into today’s XAU/USD Technical Analysis. 

May 21, 2020, | AtoZ Markets – Gold is currently trading around $1735 area, while trying to push lower. The price broke below the dynamic levels on the intraday chart quite impulsively. Gold price fell today during the Asian session giving up its previous session gains. Besides, U.S. Federal Reserve’s promise to keep the interest rates at near-zero and continue to provide the economy with a low rate until COVID-19 pandemic is gone.

Furthermore, Fed Chairman, Jeromy Powell said, “The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. We will maintain the rate at this level until we’re confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals.” He also added, “That’s the test; some things have to happen before we consider. We’re going to be watching, and willing to be patient, certainly.”

Gold Failed to Break the Psychological Level May Decline Further

XAU is currently residing near $1735 area and trying to push down. Moreover, Gold may face support at $1730 area and climb higher in the coming days.

Gold Failed to Break

Image: Gold 4 Hour Chart

According to the 4-hour chart, Gold is currently residing near $1735 area and trying to decline. As per the current price action, if the price reaches $1730 area and bounces higher, the bulls may push the price higher towards $1765 again. Alternatively, if the price breaks below $1730 area impulsively, the bears may move the price down towards $1700 in the days ahead.

Along with this, the dynamic level of 20 EMA is currently residing above the price, along with the Kijun line and Tenkan line. The dynamic levels may work as strong support to push the price down. Besides, the MACD lines are currently residing above 0.00 level and sloping down gradually, which indicates bears are quite strong and may continue further.

XAU May Revert Back to the Mean

According to the daily chart, Gold failed to break above $1750 and currently residing near $1735 area. As per the current price action, if the price pushes down towards the dynamic level and bounces higher with an impulsive daily close. The bulls may recover higher towards $1800 in the coming days.

Gold Failed to Break - AtoZ Markets

Image: Gold Daily Chart

Besides, the dynamic level of 20 EMA is currently residing below the price. It may pull the price down as Mean Reversion. Similarly, the Stochastic Oscillator lines are residing below overbought level 80 but may follow the uptrend line in the process.

To conclude, after breaking above the bullish pennant Gold may take deeper retracement towards the dynamic level 20 EMA. As the price remains below $1750, the Bearish pressure may continue in the pair. 

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