2016-10-18 15:23:46

Review and dynamics
Today, the price of gold has grown by 0.5% for the first time since the beginning of this month. At the same time the USD is declining in the market, due to take profit in long positions.

According to CME Group, probability of the rate hike in the USA in December is 69%. However, this increase has already been incorporated into the price of the USD. Now the USDF will undergo short-term correction and short positions in the short-term will be preferable.

As long as the pair XAU/USD is below the key resistance level of 1268.00 (ЕМА200 on daily and weekly charts), pressure on the pair will continue.

Our opinion
On the daily and 4- hour charts the indicators OsMA and Stochastic give signals for long positions, showing that the pair is undergoing upward correction. The nearest targets are at the resistance levels of 1268.00 and 1285.00 (ЕМА144 on the daily chart). Further rise in the pair XAU/USD is unlikely.

The pair XAU/USD has broken down important support level of 1268.00 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% after the decline since October 2012).

We can assume that the decline in the price of gold and in the pair XAU/USD will continue with the target of 1218.00.

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

After consolidation of the pair above the level 1285.00, long positions will be advisable in the medium-term. After consolidation of the price above the local resistance level of 1324.00 (Fibonacci 38.2%) buy positions for gold are recommended. In case of breakout of the range above the levels of 1370.00 and 1385.00 the price of gold may rise up to $1400.00 per ounce.

Support levels: 1250.00 and 1218.00.
Resistance levels: 1268.00, 1285.00, 1324.00, 1350.00, 1370.00, 1385.00 and 1400.00.

Trading tips
Buy Stop: 1272.00. Stop-Loss: 1265.00. Targets: 1285.00, 1300.00, 1324.00, 1350.00 and 1370.00.
Sell on the market. Stop-Loss: 1272.00. Targets: 1250.00, 1218.00 and 1200.00.

In the descending channel
In the descending channel

The indicators give signals for long positions
The indicators give signals for long positions