As the USD strengthens across the after the US election, commodity prices based on the greenback have been falling. XAU/USD for example fell sharply after an initial shake.
XAU/USD Daily Chart 11/14
(click to enlarge)
Sharp dip vs. key support:
- Last week's decline was very sharp and will likely carry momentum into this week.
- However, we do see a critical support area coming up.
- For example, 50% fibonacci retracement is around 1210.
- But anticipating further extension, we should monitor the 1190-1200 area for support.
- This area involves a common support from February through May and 1200 is a psychological level.
- Look for the RSI to form a bullish divergence as well.
- I think we should get a pullback towards at least 1250 from this crtiical support area.
Elbow space and 61.8% fibonacci retracement:
- If price extends below 1190 without stopping, I would look at the 1170-1175 area for support.
- This is the 61.8% fibonacci retracement level and if the market does indeed react here, we can anticipate a bullish swing towards 1250.