$XAUUSD - Decisive level is being testedHi guys! 👋🏻
🔔 The tension around the stimulus bill rises as President Biden decided to imply stricter income limits on the next round of stimulus checks payouts. Under the new amendments, individuals who earn more than $80,000 per year, single parents earning more than $120,000 per year, and couples earning $150,000 will be disqualified from receiving the stimulus aid.
🔔 Recuperating labor market in the US, decreasing Covid-19 cases could be the main motivator for the Biden Administration to further imply limits to the stimulus bill. Stronger US Dollar resulted in a significant drop of Gold.
🔔 The Gold demand decreased drastially by the end of 2020. There was a full outflow in Gold ETF's on the US for the Q4 of 2020, while the European ETFs saw an inflow of 17 tonnes. The total number of investment shares of Gold Globally in Q4 2020 dropped by 71%.
🔔 As seen on the daily XAU/USD chart, Gold has touched the lower edge of the descending parallel channel, which acts as a great support.
🔔 The support can withstand the upcoming US Employment data which is expected to be worse than during the previous period, however for the longer term, Gold might continue the downtrend. In both previous severe drops, Gold rebounded sharply, see supports on August 12, November 30, current candle suggests that buyers are exhausted and the downtrend will continue.
🔔 Nevertheless, do not short until it closes below the dynamic support. Gold investors will be thoroughly watching the speech of the FED Chair Mr. Powell later today. Highlights on the economic state of the US could be decisive for the further trend continuation of Gold.
✊🏻 Good luck with your trades! ✊🏻
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