Current trend

The price of precious metals is gradually declining against the strengthening of the US dollar.

Today a block of US new is released from 3:30 p.m. (GMT +3) to 10:00 p.m. It is worth noting the Fed Chair Janet Yellen speech to the US Congress. In her last speech on July 10, she confirmed the Fed's intention to gradually tighten the monetary policy.

The Greek crisis is not fully settled yet, and, as the financial markets are not stable enough, the Fed may postpone the interest rate hike. The US dollar is a more preferable asset than precious metals. Against the strenghtening of the US currency, the income potential of investment precious metals reduces.

Support and resistance

In the medium term, amid the strengthening of the US dollar, the price of gold tends to decrease. The target levels are 950.00 (EMA144 on the monthly chart), 1072.00 (EMA200 on the monthly chart), 1131.80 (2014 low), 1142.60 (2015 high), 1149.50 (0%Fibonacci).

The price is moving towards the bottom line of the descending channel and this year lows of 1142.60.

If the resistance level 1149.50 (0% Fibonacci) is broken through, the price drop accelerates.

On the weekly chart the target is 1072.00 (bottom line of the channel).

The pair growth is limited by resistance levels 1185.25 (23.6%Fibonacci), 1197.00 (EMA144), 1207.50 (38.2% Fibonacci and EMA200 on the daily chart).

In the medium term, short positions are still relevant.

OsMA and Stochastic indicators on the daily and 4-hour charts give sell signals.

Support levels: 1149.50, 1149.00.

Resistance levels: 1165.00, 1174.50, 1178.00, 1180.00, 1185.25, 1197.00.

Trading tips

Open short positions from the current price and from 1158.00, 1160.50, 1165.00, 1169.30, 1172.00, 1174.50 with targets at 1149.50, 1148.00, 1143.00 and stop-loss at 1175.00.

If OsMA and Stochastic indicators on the daily and 4-hour charts give appropriate signals, alternative long positions with the targets at 1185.25, 1198.00 may be opened after the breakout of 1178.00.

XAU/USD: US dollar strengthens — precious metals weaken

XAU/USD: US dollar strengthens — precious metals weaken


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