empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

19.08.202215:20 Forex Analysis & Reviews: XAU/USD: dollar demand prevails over gold demand

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

The dollar continues to strengthen, and the dollar index (DXY) ends the week with a decent gain. Yesterday DXY decisively broke through the local resistance level of 107.00 and, as of this writing, DXY futures are trading near 107.62, returning to the ascending channel on the daily DXY chart and heading towards the next "round" resistance level of 108.00. Our yesterday's forecast on this matter was justified, and now after the breakdown of the local multi-month high of 109.14, reached in mid-July, the mark of 110.00 will be the next growth target for DXY (the upper limit of this channel passes through it).

Exchange Rates 19.08.2022 analysis

Due to the absence of important publications for the market in today's economic calendar, the emerging trend of strengthening the dollar today is likely to continue until the end of the trading day.

Next week, market participants will be watching the Fed's annual economic forum in Jackson Hole, Wyoming, which will bring together representatives of the world's leading central banks and economists. Statements by representatives of central banks may have a significant impact on national currencies. As was the case in previous forums, Fed Chairman Jerome Powell is scheduled to speak at its opening (August 25). Undoubtedly, the main issue for market participants is the topic of tightening monetary policies by the world's leading central banks and their fight against galloping inflation.

In the meantime, the dollar is successfully recovering the positions lost in the previous three weeks, also strengthening against the traditional defensive assets—the yen, the franc, and gold.

As for this precious metal, its quotes are extremely sensitive to changes in the monetary policy of the world's leading central banks, especially the Fed. Gold does not bring investment income but is in active demand during geopolitical and economic uncertainty, and is a protective asset in the face of rising inflation. Now is just such a moment.

Exchange Rates 19.08.2022 analysis

However, it seems that it is losing its role as a protective asset to the dollar. XAU/USD pair is falling today for the 5th day in a row, and as of this writing, it is trading near the 1753.00 mark, near the strong support level of 1748.00. In case of its breakdown, the key support level 1690.00 becomes the target, the breakdown of which will cause XAU/USD to enter the zone of a long-term bear market.

Jurij Tolin
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off