Following the minor correction last week, which was triggered by the US Fed decision on the interest rate, today, the price of the precious metals goes down. At the end of yesterday’s trades at COMEX quotes of the August futures for gold fell by 1.5% to $1184.10. The prices of the other precious metals also fell down. The pair XAG/USD fell by 25 points and is now traded near the bottom line of the upward corrective channel (15.87).
Today, investors will focus their attention on the U.S. news which will be released starting from 15:30 (GMT+3). The data on the orders for durable goods will help to obtain a better idea about the timing of the interest rate increase. As we know, the US Fed announced that the rate would be raised twice before the end of this year. Later, before 17:00 (GMT+3), housing price index, business activity index in the manufacturing sector for June, as per Markit, and sales of the new houses in May will become known. The forecast is favourable and if it comes true, the USD will continue to rise and the pair XAG/USD will continue to decline.
Support and resistance
The pair continues to decline to the lows of 2014 at the level of 14.45. The rise in the pair is limited by the resistance levels of 16.75 (Fibonacci level 23.6%), which coincides with ЕМА144 and 17.00 (ЕМА200 on the daily price chart).
On the daily and four-hour charts the indicators OsMA and Stochastic give sell signals. Support level is at the bottom line of the ascending corrective channel 15.87 and 15.60 (April lows), 15.30 (Fibonacci level 0%). The pair fell below 16.18, which is important support level (ЕМА200 on the monthly chart). If the decline continues, the pair can go below the lows of November 2014 (14.45).
Support levels: 15.30, 15.60 and 15.85.
Resistance levels: 16.35 and 16.75.
It is recommended to open short positions with the targets of 15.85, 15.60 and 15.30 and stop-loss at 16.25. In case of breakdown of the level of 16.35 long positions with the targets of 16.75 and 17.00 can be possible.