2016-07-18 17:13:38

Review and dynamics
Although demand for gold increased after

The terrorist attacks in France, at the closing session last Friday the price of gold dropped due to the rise in the USD.

Since the opening session on Monday the price of gold is under pressure; support line for the pair XAU/USD is at the level of 1323.00 (Fibonacci 38.2%, ЕМА144 and the lower line of the ascending channel on 4-hour chart).

Demand for gold in supported by the uncertainty in the financial markets after Brexit.

On the daily, weekly and 4-hour chart the pair XAU/USD remains in the ascending channel. On the weekly chart the upper line of the channel is above the level of 1385.00 (highs of 2014) and 1410.00 (Fibonacci 50% to the wave of decline since October 2012).

Our opinion
Desite continuing demand for gold, on the daily and 4-hour charts the indicators OsMA and Stochastic give sell signals

On the weekly and monthly charts Stochastic also gives signal for short positions. From the technical point of view, downward correction may continue with the targets of 1310.00 (EMA200 on 4-hour chart), 1300.00 (EMA50 on the daily chart and psychological level).

Further correction to the level of 1260.00 (EMA200 and the lower limit of the channel on the weekly chart) may bring the pair back to the downtrend, which may resume after if the price goes below the levels of 1230.00 (EMA200 on the daily chart) and 1218.00 (Fibonacci 23.6% level).

Meanwhile, fundamental factors are in favor of the buy positions and the rise in the price of gold is likely to continue.

Before placing buy orders it is advisable to wait for the buy signals from the indicators on the daily and 4-hour charts. The targets can be the levels of 1385.00 (upper line of the ascending channel on the weekly chart), 1410.00 (Fibonacci 50.0%), 1435.00 (highs of 2013) and 1500.00.

Support levels: 1323.00, 1310.00, 1300.00, 1260.00, 1230.00 and 12180.00.
Resistance levels: 1340.00, 1350.00, 1370.00, 1385.00, 1400.00, 1410.00, 1435.00 and 1500.00.


Trading tips
Buy Stop: 1335.00. Stop-Loss: 1322.00. Targets: 1340.00, 1350.00, 1385.00, 1400.00, 1410.00, 1435.00 and 1500.00.
Sell Stop: 1318.00. Stop-Loss: 1330.00. Targets: 1310.00, 1300.00, 1260.00, 1230.00 and 1218.00.

In the ascending channel
In the ascending channel

At support level of 1323.00
At support level of 1323.00