At the beginning of this trading week the metal was declining amid strengthening in the USD. Yesterday the pair XAU/USD managed to break out resistance level of 1200.00, and stopped at the level of 1190.00, which coincides with Fibonacci retracement of 23.6%.
Although gold was able to go beyond upward channel, it is yet clear whether it is the trend a reversal or just a correction. “Bears” try to go through below the level of 1190.00, their next target will be the level of 1150.00.
US retail sales data, which will become known today, can trigger further strengthening in the USD. At the moment, gold is traded at the level of 1195.00. If the “bulls” fail to win back lost positions, the pair can go to 1180.00 or further down.
Support and resistance
Resistance levels: 1200.00, 1210.00, 1220.00 and 1228.00. Support levels: 1190.00, 1180.00, 1175.00 and 1170.20. The “bears” are targeted at consolidation below the level of 1180.00.
It is recommended to open short positions below the level of 1190.00 with the target of 1170.20. Long positions can be opened if the pair breaks down the level of 1212.00. The target of the buy positions is the level of 1228.00.