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XAUUSD – Lana favors buying based on early week volatility
fundamental analysis
The Federal Reserve recently announced that it will end the QT (quantitative tightening) program on December 1, with the federal funds target interest rate at 3.75-4%.
When the Fed stops QT, the pace of balance sheet shrinkage slows, which means there is less pressure to withdraw liquidity from the market, which is generally a positive for risk assets and gold.
About the mechanism:
QE: Expand the balance sheet and inject liquidity into the market.
QT: Shrink the balance sheet and withdraw liquidity.
The QT pause has led to expectations that the Federal Reserve will adopt a looser monetary policy, which supports gold’s medium-term bullish trend.
Against this background, Lana believes that gold still has room to rise at the beginning of the week, but there will be some shocks around important liquidity areas.
technical analysis
On the H4 framework, the price structure follows a bullish Elliott wave with a clear trend (1)-(2)-(3)-(4)-(5). The current bullish wave has yet to give a clear reversal signal.
The 4190-4195 swing area below is the recent important bottom and plays an important supporting role in the short term. Here too, Lana prefers to monitor purchases based on waves.
To summarize, there are two areas of liquidity to focus on:
4250-4260: Near the liquidity area, a hypothetical breakout/correction is possible.
4365-4370: The outermost liquidity area, coinciding with the old highs, can easily become a strong profit-taking area if the price continues its upward trend.
Lana’s preferred scenario: Gold prices may pull back slightly toward the 4190-4195 swing area, then continue to expand volatility and successively test the liquidity area above. However, just in areas of liquidity, the market can easily clear stops on imaginary breakouts, so Lana discourages buying in these areas.
Price areas to watch
Major Support (Swing and Buy Zone): 4190 – 4195
Resistance/Flow Zone: 4250 – 4260
4365-4370
Trading scenario
Purchase 4190 – 4195
Stop loss: 4185
Take Profit: 4250 – 4260 – 4365 – 4370
