2016-10-14 15:04:55

Review and dynamics
The price of gold sharply fell last week after the publication of positive US macro-economic data and tough Fed’s comment, which increased probability of the rate hike in December.

However, the minutes of the last FOMC meeting showed uncertainty about the timing of the rate hike and difference in opinions of FOMC representatives on this issue.

On the other hand, the rise in the USD in the market puts pressure on the price of gold and the pair XAU/USD.

The pair XAU/USD has broken important support level of 1270.00 (ЕМА200 on daily and weekly charts) and continues to go down in the descending channel on the daily chart with the lower limit near the key support level of 1218.00 (Fibonacci 23.6% to the downtrend since October 2012).

Now the price of gold is at the 4-month lows.

On the weekly chart the pair XAU/USD has broken down the lower limit of the ascending channel at the level of 1300.00.

Our opinion
On the weekly and monthly charts the indicators OsMA and Stochastic give signals sell.

On the daily chart the indicators give signals for long positions, showing possibility of the short-term correction to the level of 1270.00.

However, on 4- hour chart, the indicators give signals for short position. It means that the correction to the level of 1270.00 (ЕМА200 on daily and weekly charts) may not take place.

The price has broken down important support levels of 1300.00 and 1270.00. Downtrend in the pair XAU/USD continues.

Breakdown of support level of 1218.00 (Fibonacci 23.6%) may cause further decline in the pair XAU/USD and resumption of the downtrend, which began in October 2012.

In the medium-term long positions can be advisable if the price consolidates above the level of 1270.00. Consolidation of the price above the local resistance level of 1324.00 (Fibonacci 38.2%) may trigger further rise in price. If the most optimistic forecast comes true, the price of gold will break out the range above the levels of 1370.00, 1385.00 and the price of gold will go up to $1400.00 per ounce.

Support levels: 1250.00 and 1218.00.
Resistance levels: 1270.00, 1300.00, 1324.00, 1350.00, 1370.00, 1385.0 and 1400.00.

Trading tips
Buy Stop: 1275.00. Stop-Loss: 1265.00. Targets: 1290.00, 1300.00, 1324.00, 1350.00 and 1370.00.
Sell on the market: Stop-Loss: 1275.00. Targets: 1218.00 and 1200.00.

Indicators give signals to sell
Indicators give signals to sell

In the descending channel
In the descending channel