Today the XAU/USD pair is strengthening after a fall in the middle of the week.
Pressure on the pair comes from strengthening US dollar that grew after the ECB meeting yesterday. The regulator decided not to change its current monetary policy measures but maintained soft rhetoric as was predicted by nearly all experts. Amongst other things, ECB President Mario Draghi mentioned a possibility of extension of the QE program.
Support and resistance
Bollinger Bands on the daily chart is turning horizontally, while the price range is narrowing. MACD continues moving downwards. Stochastic has reached the oversold zone and is trying to turn up indicating a possibility of a short-term growth in the pair.
The indicators recommend waiting for clearer trading signals.
Support levels: 1162.56 (local lows), 1156.40, 1153.46, 1148.43, 1141.60, 1136.37 (9 October low), 1127.80, 1121.11.
Resistance levels: 1170.00 (local high), 1174.70, 1180.51 (20 October high), 1186.50, 1191.21 (15 October high), 1194.20.
Open long positions from current prices with targets at 1180.00, 1185.00 and stop-loss at 1168.00. Validity – 1-3 days.
Short positions can be opened below the level of 1155.20 with the target at 1138.00 and stop-loss at 1158.80. Validity – 2-3 days.