Throughout this week downtrend has dominated, as the metal failed to break down resistance level of 1220.00. The meeting of the Monetary Policy Committee of the US Federal Reserve showed that the increase in the interest rate can take place in the summer, and this fact has put pressure on gold. As the result, the pair XAU/USD had first stopped slightly above Fibonacci level of 23.6% and then corrected to 1205.00. Despite provided support, investors are losing interest in the USD, which reduces chances of further decline in gold.
Technical indicators show that XAU/USD is still in the upward channel near its bottom limit, which gives a chance for opening long positions. The “bulls” will try to break down resistance level of 1220.00 and consolidate above it. Stochastic is in the oversold zone, giving a buy signal.
Support and resistance
Resistance levels: 1210.00, 1220.00 and 1230.00. The main target of the “bulls” is the level of 1220.00. Support levels: 1200,00 1190.00 and 1180.00.
Long positions can be opened above the level of 1220.00 with the target of 1230.00. Pending buy orders can be placed at the levels of 1200.00 and 1180.00. Sell positions can be opened below the level of 1180.00 with take profit at 1163.42.