2016-10-24 15:58:04

Review and dynamics
Over the past four days the pair XAU/USD has been close to the level of 1268.00 (ЕМА200 on daily and weekly charts). The pair is traded in a very narrow range. On the daily chart the pair is in a descending channel and on the weekly chart the pair is in the ascending channel.

Our opinion
On the weekly and monthly charts the indicators OsMA and Stochastic give signals for short positions. On the daily and 4- hour charts the indicators do not give clear signals. It seems that the flat is possible.

In the case of the rise in the pair XAU/USD, the target will be the resistance level at 1285.00 (ЕМА144 and the upper limit of the descending channel on the daily chart). Further rise in the pair XAU/USD is unlikely. Lower limit of the channel is near the key support of 1218.00 (Fibonacci 23.6% after the downtrend since October 2012).

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

In the medium-term the rise in the pair will be possible after the rise in price above the level 1285.00. After consolidation in the price above the local resistance level of 1324.00 (Fibonacci 38.2%) will buy positions will be advisable. After the rise above the levels of 1370.00 and 1385.00, the price may increase up to $1400.00 per ounce.

However, if the US Fed confirms intention to raise interest rate the price of gold will go down.

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

Trading tips
Buy Stop: 1280.00. Stop-Loss: 1265.00. Targets: 285.00, 1300.00, 1324.00, 1350.00 and 1370.00.
Sell Stop: 1260.00. Stop-Loss: 1272.00. Targets: 1250.00, 1218.00 and 1200.00.

In the ascending channel
In the ascending channel

In the descending channel below the level of 1268.00
In the descending channel below the level of 1268.00