XAUUSD MACD Analysis

The MACD indicator was developed by Gerald Appel.

MACD Indicator is one of the simplest and most commonly used indicators available. MACD Indicator is a momentum oscillator with some trend following characteristics. Most popular technical analysis of MACD Indicator first calculates the difference between two moving averages and plots that as the MACD Indicator "Fast" line: A second MACD Indicator "Signal" (trigger) line - Signal is then calculated from the resulting "Fast" line and plotted in the same frame as the MACD Indicator "Fast" line. The "standard" MACD values for the "Fast" line are a 12-period exponential moving average and a 26-period exponential moving average and a 9-period exponential moving average for the MACD Indicator "Signal" line.

Interpretation of MACD Indicator - MACD Analysis

MACD Indicator is widely used as a trend following indicator & tends to work most effectively when measuring wide swinging price movements. There are three basic techniques for using MACD Indicator to generate trading signals.

MACD Cross over Signals:

1. MACD Indicator Fast line MACD Indicator Signal line Crossover: A buy signal occurs when the MACD Fast line crosses above MACD Signal line and a sell signal occurs when MACD Fast line crosses below the MACD Signal line.

2. Fast line / Zero-Level Crossover: - MACD Buy & Sell Trading Signal Indicator When MACD Fast line crosses above zero center line mark a buy signal is given. Alternatively, when the MACD Fast line crosses below zero center line mark a sell gold trading signal is given.

Gold MACD Analysis

XAUUSD divergences between the MACD indicator & gold price can prove to be a very effective strategy in identifying potential trend reversal &/or trend continuation levels in price movement. There are several types of MACD indicator divergences:

MACD Classic Divergence

• MACD Bullish Divergence = Lower lows in price and higher lows in MACD indicator
• MACD Bearish Divergence = Higher highs in price and lower highs in MACD technical indicator

MACD Hidden Divergence Setup

• MACD Bullish Divergence = Lower lows in MACD and higher lows in price
• MACD Bearish Divergence = Higher highs in MACD & lower highs in price

MACD indicator Overbought Oversold Levels:

MACD indicator can be used to identify potential overbought & oversold levels in price movements. These MACD indicator overbought oversold levels are generated by comparing the distance between the shorter moving average & the longer moving average: if the shorter moving average separates dramatically from the longer moving average it may be a signal that price is over extending & the price will soon return to more realistic levels.

Implementation of MACD Technical Indicator

The MACD indicator Fast Line is plotted as a solid blueline. The MACD indicator Signal Line is plotted as a solid redline. A green histogram plot that represents the difference between the MACD Fast-line & the MACD Signal Line has also been included to make identifying MACD indicator cross-over points easier.

MACD Indicator - MACD Analysis - MACD Strategy