On Monday, the price of gold significantly fell despite a weakening in the USD.
At the same time, commentaries of Fed officials point out that the interest rate increase is going to happen in the near future thus increasing demand for the Dollar. Last Thursday, the Fed Chair Janet Yellen confirmed that the regulator is going to continue with its monetary policy plans. Furthermore, at yesterday’s press conference one of the Fed members William Dudley stated that the rate could be increased on the October meeting, though experts consider the chances of that as very small.
Support and resistance
Bollinger Bands on the daily chart continues with a moderate growth, while the price range is narrowing. The indicator has formed a sell signal. MACD is falling. Stochastic is in the middle of its range and maintains the downward movement.
The indicators recommend short positions.
Support levels: 1127.80 (28 September low), 1121.11 (22 September low), 1115.70, 1110.00, 1105.50, 1101.05, 1098.50 (11 September low).
Resistance levels: 1134.30 (local high), 1141.47 (18 September high), 1147.66, 1156.40 (24 September high).
Short positions can be opened after the breakdown of the level of 1120.00 with the target at 1110.55 and stop-loss at 1128.70. Validity – 1-3 days.
Long positions can be opened after the breakout of the level of 1134.30 with the target at 1141.47 and stop-loss at 1129.00. Validity – 2-4 days.