A two-week growth of the XAU/USD pair stopped after the Speech of the Fed’s Chair Janet Yellen, in which she said she still expects a rate increase this year.
However, though the US economy is doing better comparing to other world economies, it is not strong enough for tightening of monetary policy. Declining oil prices, still low US inflation and China economic slowdown may influence the Fed interest rate decision.
Support and resistance
The price of gold rebounded down from the strong resistance level of 1155.00 (ЕМА144 on the daily chart and 50.0% Fibonacci). After the breakdown of 1138.00 (38.2% Fibonacci), the pair may head down to the support level of 1118.00 (23.6% Fibonacci) and further to year lows at 1085.00. Otherwise, after the consolidation above 1155.00, the pair may grow to the resistance level of 1170.00 (ЕМА200 on the daily chart and 61.8% Fibonacci). A medium-term upward movement is possible only after the breakout of the level of 1185.00 (ЕМА50 on the weekly chart and the upper border of the channel on the daily chart).
Though OsMA and Stochastic indicators on the daily chart recommend purchases, they are starting giving sell signals on the 4-hour chart.
Support levels: 1105.00, 1118.00, 1126.00, 1138.00.
Resistance levels: 1155.00, 1170.00, 1185.00.
Long positions can be opened from the current levels with the target at 1153.84 and stop-loss at 1140.70.
Alternative Sell Stop order can be placed at the level of 1136.90 with targets at 1128.10, 1119.90 and stop-loss at 1140.00.