On the four-hour chart the pair is undergoing correction after a leap of price on Monday associated with the release of the business activity index in the US manufacturing sector. At the moment, the price is trying to reach important support level of 1180.00, forming a pattern “downward triangle”. The chances are high that the price movement will stop after breakdown of the bottom limit of the triangle (1180.00), as generally, downward trend dominates. In this case the price of the pair XAU/USD can drop to 1174.70 and 1171.60.
In general, technical indicators confirm that the price can continue to decline. Bollinger bands are reversing down. MACD histogram is in the negative zone; they are horizontal being in the uncertainty of uncertainty.
On the daily chart the price has broken down the middle line of Bollinger bands (1199.55) and it now trying to reach the bottom limit of the wide sideways channel at the levels of 1174.70 and 1171.60. After reaching these levels the price can reverse and resume upward movement.
Technical indicators demonstrate that uptrend will continue. The price has broken down the middle line of the Bollinger bands indicator, enabling the decline to the bottom line. MACD histogram is in the negative zone; its volumes are increasing. Stochastic lines are crossing at the moment and can turn down soon.
Support and resistance
Support levels: 1180.00, 1174.70 and 1171.60.
Resistance levels: 1188.65, 1194.4 and, 1199.65.
Based on the technical indicators we can expect that in the near future the price will continue to decline to 1174.70 and 1171.60. Short positions with the above-mentioned levels as the targets can be opened if the price breaks down the level of 1180.00. Pending orders to buy can be placed at 1171.60 with the target of 1188.65.