XAU Supported, Defends Key Technical Levels

  • XAUUSD
    (${instrument.percentChange}%)

XAU/USD

Investors appear edgy as they monitor various risk factors, such as the situation in Ukraine, a recent surge in CoVID-19 cases in China, as well as renewed concerns around the country's property market.

On the Russia-Ukraine front, Kremlin spokesperson Dimitry Peskov refused to rule out the use of nuclear weapons when asked in an interview with Christiane Amanpour. He noted that, "if it is an existential threat for our country, then it can be used". [1]

US National Security Advisor Jake Sullivan said yesterday that the US intends to impose further sanctions against Russia, with the announcement expected in Thursday. [2]

The pandemic situation in China is another area of concern as the country's zero-Covid policy creates fears around economic growth, amidst a recent rise in infections. In today's update, the authorities announced 2,667 new local COVID-19 cases in mainland China on March 22, up from 2,338 in the previous day. [3]

Fears around China's property market have resurfaced this week, as the embattled developer Evergrande announced yesterday that it will miss the March 31 deadline for publishing its 2021 financial results [4], followed today by a similar announcement from Kaisa Group, which cited recent Covid-19 lockdown in Shenzhen as the reason for this [5].

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Sentiment sours today given these developments, helping the precious metal, after its worst week of the year. It manages to defend the key technical levels we had highlighted in the last analysis – the EMA 200 (black line) and the 50% Fibonacci of the 2022 High/Low rise.

This gives it the opportunity to push for 38.2% at 1,959, but we are cautious at this stage for its ascending prospects above this are and towards 1,992-2,000.

Despite upbeat mood today, recent hawkish Fed commentary in the aftermath of last week's rate lift-off, support the greenback and contain XAU/USD. Failing to make notable progress so far, it is in danger of fresh pressure and new March lows (1,894), but catalyst will be needed for a bigger decline towards the ascending trend-line form this year's lows (currently at around 1,860).

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 23 Mar 2022 https://www.youtube.com/watch

2

Retrieved 23 Mar 2022 https://www.whitehouse.gov/briefing-room/press-briefings/2022/03/22/press-briefing-by-deputy-press-secretary-chris-meagher-and-national-security-advisor-jake-sullivan-march-22-2022/

3

Retrieved 23 Mar 2022 http://en.nhc.gov.cn/2022-03/23/c_85895.htm

4

Retrieved 23 Mar 2022 https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0322/2022032200295.pdf

5

Retrieved 27 Jun 2022 https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0323/2022032300009.pdf

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