This week, the price of gold continues declining. Due to the lack of macroeconomic releases and the US Labor Day celebrations, the European indexes were the main driving force.
At the same time, analysts are still considering the US labor market indicators, released last Friday. The Unemployment Rate declined, but Nonfarm Payrolls statistics came in much worse than it had been expected. Moreover, market participants focus their attention on China's economy as, nowadays, it significantly influences the precious metals prices.
Support and resistance
Bollinger Bands indicator on the daily chart signals a formation of a weak upward downward trend. The middle MA is trying to turn down, while the price range has already started to widen at the bottom. MACD continues declining. It is recommended to keep existing and open new short positions.
Stochastic is in the oversold zone and is trying to turn up which may be considered as a possibility of an upward correction in the short term.
Support levels: 1115.70 (7 September local low), 1110.00, 1105.00, 1101.60, 1094.50, 1087.00, 1080.70, 1077.20 (24 July low).
Resistance levels: 1121.63, 1126.50, 1134.30, 1140.53, 1147.66 (1 September local high), 1156.40, 1166.20, 1169.81 (24 August high), 1174.70.
When the pair turns up at the current levels, e.g. 1115.70, open long positions with targets at 1134.30, 1150.53 and stop-loss at 1100.00.
When the pair breaks down the level of 1110.00 open short positions with the target at 1100.00 and stop-loss at 1117.00.