At the beginning of the week gold sharply went up. On Monday, after closing of the American session, the metal exceeded the level of 1200.00 and consolidated there. This level was a strong support, which prevented further decline in the pair. After that the pair XAU/USD tested the level of 1215.00 (Fibonacci retracement of 38.2%), but failed to break through and corrected. Currently, the metal is traded in the range of 1200.00 – 1210.00 and the “bears” have no chances to win back lost positions so far.
On the four-hour chart, the pair XAU/USD is traded in the channel of 1190.00-1210.00. It will be difficult for the pair to break out the upper limit of the channel. Technical indicators give mixed signals, demonstrating sideways trend. Stochastic is in the oversold zone, giving a buy signal. MACD, on the contrary, is giving a sell signal. The best option is to trade within the channel from its borders.
Support and resistance
Support levels: 1200.00, 1190.00 and1180.00.
Resistance levels: 1210.00, 1215.00, the latter one is the main target of the “bulls”.
It makes sense to open short positions from the level of 1215.00 and below the level of 1190.00. Buy from the levels of 1200.00 and 1190.00.