The gold has been depreciating against the dollar for 1.5 months and the pair has almost reached the recent local low at 1133.05. It's worth noting that the gold is no longer a safe haven asset as investors prefer oversold currencies despite geopolitical tension and financial crises. However, the main reason for decline has been the growing dollar. Upbeat macroeconomic indicators pushed the American currency higher and higher; the pair reached a level of 1147.50 last midweek and consolidated nearby.
Today's important statistics for US manufacturing production can influence the pair.
Support and resistance
The American currency is very likely to go on rising, but the dollar is greatly overbought and therefore the growth cannot continue endlessly. Fundamental factors should be considered in this situation; therefore we suggest placing long pending orders from key support levels and local lows. The most important levels are the support ones at 1133.00 and 1118.45 and resistance ones at 1207.80 and 1238.00. Indicators are pointing to a further downtrend and a possibility of testing new local lows.
Support levels: 1147.45, 1142.15, 1133.05, 1118.45, 1105.52.
Resistance levels: 1177.60, 1193.00, 1207.80, 1221.70, 1238.00.
We recommend opening long pending positions, keeping in mind that the decline will continue with a probable subsequent rebound from the key support levels at 1133.00 and 1105.50.