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XAU/USD statistical and technical analysis

The current price of XAU/USD - Gold Spot US Dollar is 1 763 (August 06, 2021). This commodity is currently being traded in an important area after a decline caused mainly by the strengthening of the US dollar. It may still play a major role for this commodity in the near future. Let’s now look at statistical and technical analyzes.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 0.76% and -0.77% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.40% and -0.36% . Friday´s return was -2.29% , which is above the second standard deviation. Our scoring is currently neutral (0 ) for the month-on-month change and -1 for price indexation. Both scorings range from -3 up to 3 , which means that we estimate the negative phase of the cycle. The development of the estimated cycles based on our analytical system is shown in the following chart.

XAU/USD daily price indexation Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. XAU/USD fell below the medium-term MA again yesterday. Therefore, as we can see in the chart below, all MAs currently support bearish sentiment.

XAU/USD daily price development Source: WALFIR

Since our last analysis, we have witnessed more upward trends, with the maximum level reaching 5 consecutive days. However, the maximum increase was 8 days in the measured period. The downward trend in recent weeks have not exceeded more than 2 days. The maximum for the last 3 years is 6 days. We could use the average long-term ATR (Average True Range) obtained from daily data (1.44% ) to estimate Stop Loss orders for our positions. The current value is 1.78% , which is slightly above its long-term average. Approximately 90% confidence interval (return between -1.6% and 1.6% ) is shown in the histogram below by a red rectangle.

XAU/USD daily return distribution Source: WALFIR

We could use the last decile of low to high returns (2.50% ) to estimate Profit Targets, as shown in the chart below.

XAU/USD daily low to high distribution Source: WALFIR

Basic technical analysis supports short-term bearish sentiment after yesterday’s dynamic decline. XAU/USD is currently very close to the support level of 1 760 , where is also the Fibonacci retracement level of 50.00% . The price is also below short-term and long-term moving averages. If it continues to decline, the demand zone (green rectangle), where are also the Fibonacci retracement level of 61.80% and the psychological level of 1 700 , could also provide some support for the bulls.

XAU/USD basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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