The price of gold gains support from lowering expectations that the Fed will increase interest rates as early as this year. One of the factors that may deter a rate hike is a notable slowdown of China’s economy.
At the same time, verbal intervention of the Fed’s officials restrains the price of gold from significant strengthening.
Today, attention should be paid to FOMC Member Powell Speech and Fed's Yellen Speech.
Support and resistance
The XAU/USD pair is growing and the recent resistance levels of 1168.00 (ЕМА200 on the daily chart) and 1171.00 (61.8% Fibonacci) are now the support levels. On the daily chart, the price is moving in an upward channel with a strong resistance at the level of 1180.00 (EMA50 on the weekly chart).
At the same time, OsMA and Stochastic indicators on the daily chart are turning to short positions.
Ahead of the Fed meeting, the pair is likely to trade between the levels of 1155.00 and 1190.00, close to 1170.00. However, the consolidation above the level of 1180.00 may allow the price to strengthen in the medium-term.
Support levels: 1171.00, 1168.00, 1155.20, 1138.00.
Resistance levels: 1180.00, 1190.00.
Long positions are preferable but can be opened after the breakout of the level of 1176.80 with the target at 1187.00 and stop-loss at 1173.50.
Short positions would become valid after the breakdown of the level of 1167.40 with the target at 1155.25 and stop-loss at 1170.00.