@jacksonclimber on XAUUSD | PriceONN Community
XAUUSD closed the week strongly, near the highs. RSI is definitely showing overbought conditions on the daily. A pullback early next week wouldn't be surprising, but the overall trend still looks bullish. Key levels to watch will be the previous week's high and the 50 SMA on the daily chart. Let's see if it can sustain above 5250.
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Update: Thinking more about the overbought RSI, it might be wise to wait for a confirmed retracement before considering any new long positions. A potential entry point could be around the 5230 level, coinciding with S2 pivot. Stop-loss placement would be crucial, perhaps below 5220 to account for volatility. Also, keeping an eye on the D1 candle formations for any signs of weakness. The strength of the dollar next week will likely play a significant role in gold's movement. A weaker dollar could fuel further gains, while a stronger dollar may trigger a deeper correction. Patience is key here, I think.
Hello @jacksonclimber, I agree that the RSI showing overbought conditions on the daily chart warrants caution. However, I'm curious about your reliance on the 50 SMA as a key level. While it's a commonly used indicator, in the past I've found it less reliable for XAUUSD than, say, the 200 SMA. Have you backtested its effectiveness specifically for gold? I'm currently backtesting a new strategy, and I'm always looking for ways to refine my approach. I am also curious about how you define the 'previous week's high' since that is subject to interpretation.