Review and dynamics
Yesterday’s high volatility in the financial markets caused by presidential election in the United States has affected the price of precious metals. Yesterday, the price of gold had soared up by 5% or by $62 per ounce up to 1337.00 USD per Troy ounce after the announcement of Trump’s victory in several states of the United States. Yesterday, volatility in the pair XAU/USD reached almost $70, or 5.45%.
However, by the end of yesterday's trading day the pair XAU/USD fell from the highs at the level of 1337.00, and returned to support levels of 1270.00 (ЕМА200) and 1283.00 (ЕМА144 on the daily chart).
Today, the correction is undergoing in the currency market after yesterday's volatility. The pair XAU/USD is going up with the opening of the trading day and at the beginning of the European session. Now the pair is traded at the level of 1286.00 (ЕМА200 on the hourly chart).
On the hourly and 4-hour charts the indicators OsMA and Stochastic give signals for long positions. Upward correction may continue. In case of breakout of the resistance level of 1305.00 the pair XAU/USD may continue to rise. Uptrend in the pair XAU/USD will continue as long as the pair remains above the level of 1270.00.
In case of the further rise in pair XAU/USD, next target will be at the resistance level of 1324.00 (Fibonacci 38.2%). If this level is exceeded, the pair will continue to rise in the ascending channel on the weekly chart with targets of 1385.00 (annual highs) and 1410.00.
However, if the Fed confirms intention to tighten monetary policy in December, the price of gold and the pair XAU/USD may go down.
In case of the decline below 1270.00 the price of gold and the pair XAU/USD may continue to decline in the descending channel on the daily chart with the target of 1218.00.
Breakdown of the support level of 1218.00 (Fibonacci 23.6% after the decline since October 2012) may trigger further decline in the pair XAU/USD and resumption of the downtrend, which began in October 2012.
Support levels: 1283.00, 1270.00, 1250.00 and 1218.00.
Resistance levels: 1290.00, 1305.00, 1324.00, 1350.00, 1370.00, 1385.00 and 1400.00.
Buy Stop: 1295.00. Stop-Loss: 1286.00. Targets: 1305.00, 1324.00, 1350.00 and 1370.00.
Sell Stop: 1282.00. Stop-Loss: 1295.00. Targets: 1270.00, 1250.00, 1218.00 and 1200.00.
In the ascending channel
Rebound from the level of 1270.00