Introduction
On October 22nd, 2024, new price movements may arise in the trading pair for XAU/USD or Gold/US Dollar. As volatile and a haven, gold’s movements are affected by everything that happens around the globe, and monetary policy changes also influence sentiment in the market. Today’s analysis reveals important support and resistance levels, mixed RSI within a bearish bias, and a quick plan for the short term for the trader who wants to hit it ahead of the next move. In this post, we will unravel those all-important levels, preferred trading strategies, and overall market sentiment all designed to help you navigate the market with confidence.
Levels to Watch for XAU/USD on October 22, 2024
Resistance Levels
2748.00 – The stronger resistance level
2740.00 – A middle-of-the-road resistance level
2731.00 – Pivot level that serves as a resistance level
The last resistance level was at the level 2740.00
Support Levels:
2710.00 – The initial level of support and could be the best take-profit spot
2701.00 – The extension target for the bearish runs
2688.00 – Deeper support level and the ultimate safety catch in case the price drops
These levels will provide many references for entry and exit according to price action, where resistance will be an area or a zone where selling pressure may appear, while the support will be an area or zone where buying pressure is expected or a take-profit level.
Preferred Strategy: Sell Below 2731.00
But the Short position is favored in case the price stays below the 2731.00 pivot level taking into consideration the present market view and the setup of October 22, 2024. The price should test lower levels with the first one being located at 2710.00 in extension hitting 2701.00.
Trading Strategy Breakdown
Entry Point: The best level to short from would be if it manages to break below 2731.00. The pivot point, at this juncture, becomes such an important line in the sand for traders because it is where the sellers again can gather momentum.
First Target: The very first target for this short trade would be at 2710.00, which is a significant support area and quite possibly the point at which some buying pressure may emerge. This is where traders might take partial profits or move their stop-losses to lock in gains.
This secondary lower target: will come in at 2701.00, which would be a good take-profit area in case one wants the price to move higher.
Stop Loss: above the pivot level 2731.00, ideally around 2740.00 for enough space and safeguard in case of an unexpected turnaround.
Resistance and Support Context:
2748.00 is the upper level of resistance wherein substantial sellers may enter the system if the price rallies aggressively.
The level at 2740.00 has recently acted as resistance, and it is another important region to monitor for reversal if the prices draw once again towards this level.
Below these resistances, 2710.00 and 2701.00 are important to support levels wherein it would act as a take profit point for short side position.
Technical Indicators: RSI Mixed with Bearish Bias
Relative Strength Index’s momentum oscillator demonstrates a mixed reading with a bearish bias for XAU/USD, indicating that there are periods of sideways movement or minor bullish pushes, but still, the overall sentiment is looking towards further downside potential.
The RSI is going to display a bearish bias and, therefore, is normally indicative that selling pressure can be expected to persist, which would fit the natural orientation of looking to short setups. However, significant economic news or changes in mass psychology will quickly reverse the RSI so the action taken in the price will change as a result.
Gold Market Sentiment and Factors Influencing Price Movement
Below are a few major factors influencing XAU/USD today.
US Dollar Strength: The gold price is, to a great extent, driven by the strength of the USD. On economic data or interest rates being raised, gold is likely to come under pressure as the dollar strengthens, supporting our short strategy.
Global Economic Uncertainty: In uncertain times, gold can drop sharply as investors seek safe havens. For intraday traders, this places a lot of importance on global news items.
Technical Pressure: From a technical point of view, the pattern favors the sellers below the pivot level of 2731.00, which forces the prices toward the lower levels of support.
How to Risk Manage
To perfectly risk manage employing this strategy:
Position Sizing: As a trader, you must ensure that you do not over-leverage, especially in an asset like gold. You spread your capital in smaller portions for each trade so that you can be better in control of your losses.
Stop Loss Placement: As indicated earlier, the stop loss placed at around 2731.00-about 2740.00 would be wise to prevent significant loss from sudden reversals.
Take Profit Strategy: The conservative ‘exit’ would be at 2710.00 as that could be a sound point through which most of the position could be exited. The more aggressive can then wait for the price to hit around 2701.00.
Important:
XAU/USD 22-October-2024 Sellers need to be positioned below 2731.00, but the tight stacking of resistance levels above this price point and support levels below is a great technical setup to sell into with expected selling pressure focusing the quotes even lower to target prices around 2710.00 and 2701.00. On the contrary, RSI’s bearish bias supports this outlook but the trader needs to stay alert and shift the strategy if the market sentiment about this pair turns out to be otherwise.
Of course, proper management of risk and awareness of economic events will be decisive in trading successfully. Strictly following the strategy outlined, watching key levels, and staying updated on key events would help increase the probability of capturing the move in XAU/USD.
Disclaimer:
No part of this article should be considered as financial advice or investment guidance. Forex and commodities trading, including other metals like gold (XAU/USD), is highly risky and may not work well for most traders. The strategies, analysis, and recommendations provided in this article are based on historical data and market studies up to the date of writing and do not have any sort of future results guarantee.
You should reflect thoroughly on whether your trading business is in line with your financial position and risk capacity. We cannot guarantee the accuracy or adequacy of the information, nor that the information will be updated in a timely fashion. Neither can we undertake liability for any loss you may incur as a result of any short-term market fluctuations. Any trading decision is at your own risk. Therefore, please do not hesitate to consult a financial professional before deciding on any form of investment or trade.
No responsibility can be accepted by the author or publisher for any loss or damage arising directly or indirectly from any action or decision made as a result of reading this article. Please trade responsibly.
