XAU/USD (Gold/USD) experienced a sharp decline from April 30 to May 1, temporarily dropping to the low 3200s, then rebounding to around 3254.52 on May 2. Technically, the medium-term downtrend remains intact, although short-term buying pressure may indicate a temporary pullback. The key question is whether this rebound marks a real trend reversal or just a correction.
This analysis highlights the roles of the moving averages (MA50 & MA200), ADX (trend strength), DMI (directional movement index), and volume in evaluating XAU/USD's behavior.
The chart shows XAU/USD trading clearly below both the 50-hour (blue) and 200-hour (red) moving averages, confirming a persistent downtrend. This rebound appears to be a pullback within the broader bearish trend.
The 50MA is acting as dynamic resistance, with the price being consistently capped near this level. Unless this structure breaks, traders may continue favoring a pullback-based short strategy.
The ADX (yellow) is gradually rising to around 0.15, suggesting a trend is forming. If it exceeds 0.20, a new trend will likely be confirmed. Additionally, –DI (red) is still above +DI (green), showing selling remains dominant. Despite the rebound, the overall momentum remains bearish.
Volume surged during the decline, confirming strong selling pressure. During the rebound, volume has decreased, suggesting limited buying momentum. Typically, declines with strong volume are more reliable. If volume rises again while price falls, it could signal resumption of the downtrend.
※Image source: cTrader platform
Key technical levels to watch for XAU/USD:
Bearish Scenario (Pullback Sell)
Entry: Short after failed rebound near $3260
Target: $3220–$3200
Stop Loss: Above $3265
Bullish Scenario (Reversal Attempt)
Entry: Long after a clear breakout above $3265
Target: $3280–$3290
Stop Loss: Below $3250
XAU/USD is currently in a downtrend with a temporary rebound. MA, ADX, DMI, and volume all still suggest bearish dominance. A pullback-sell strategy remains appropriate.
However, if buying continues and price breaks above $3265, a trend reversal may begin, requiring flexible risk management. Mid- to long-term traders should watch closely to determine if this rebound gains strength.
This article is for informational purposes only and does not constitute a recommendation to buy or sell any financial product. All decisions are at your own risk.
For more updates and analysis, check the FIXIO Blog.
This article is intended for informational purposes only and does not constitute financial or investment advice. The analyses and strategies mentioned are based on past data and current market conditions, and may be subject to change in the future. When making investment decisions, always conduct your own research and consult a professional if necessary.
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