2016-11-16 14:39:08

Review and dynamics
Due to the significant rise in the USD and high volatility in the financial markets after the victory of Donald Trump, the price of gold sharply fell. The pair XAU/USD has broken down important support levels 1280.00 (ЕМА144 on the daily chart) and 1270.00 (ЕМА200 on daily and weekly charts) and reached support level of 1218.00 (Fibonacci 23.6% after the decline since October 2012).

Our opinion
Pressure on gold continues. On the daily, weekly and monthly charts the indicators OsMA and Stochastic give sell signals. Breakdown of support levels of 1218.00 (Fibonacci 23.6%) and 1208.00 (lower line of the descending channel on the daily chart) may trigger further decline in the pair XAU/USD and resumption of the downtrend, which began in October 2012.

As an alternative scenario the pair XAU/USD may go up to the key resistance level of 1270.00.

The pair XAU/USD can start to rise only after consolidation of the price above level of 1280.00 and in this case long positions can be opened. After the breakout of the level 1280.00 the pair may go up to 1305.00, 1324.00 (Fibonacci 38.2%), 1350.00, 1370.00, 1385.00 and 1400.00.

Meanwhile, short positions are preferable with the targets of 1100.00 (ЕМА144) and 1000.00 (ЕМА200 on the monthly chart).

Support levels: 1218.00, 1208.00, 1160.00, 1100.00, 1048.00 and 1000.00.
Resistance levels: 1270.00, 1280.00, 1305.00, 1324.00, 1350.00, 1370.00, 1385.00 and 1400.00.

Trading tips
Buy Stop: 1235.00. Stop-Loss: 1225.00. Targets: 1270.00 and 1280.00.
Sell on the market. Stop-Loss: 1235.00. Targets: 1218.00, 1208.00, 1160.00, 1100.00 and 1048.00.

Breakdown of 1270.00
Breakdown of 1270.00

Strong downward momentum
Strong downward momentum