Review and dynamics
Positive data on the US labor market for July, released last Friday, has triggered the rise in the USD against major counterparts, including the pair XAU/USD.
However, continuing instability of the global financial markets, and low probability of the rate hike in the USA before the end of this year support high demand for gold.
Last Friday the pair XAU/USD fell by over 240 points, closing trading session at the level of 1336.00. On Monday, the price of gold continues to decline, and the pair XAU/USD is going to support levels of 1324.00 (Fibonacci 38.2% to the decline since October 2012) and 1316.00 (ЕМА50 on the daily chart, the lows of July).
The pair XAU/USD continues to rise in the ascending channel on the weekly chart with the upper limit at the levels of 1410.00 (Fibonacci 50%) and 1385.00 (highs of 2014).
On 4-hour chart the price is near support level of 1328.00 (ЕМА200), Stochastic is reversing towards the long positions. The price may rebound from support levels of 1316.00, 1324.00 and 1328.00.
In case of breakout of these levels, next support levels will be 1264.00 (ЕМА144 on the daily chart and ЕМА200 on the weekly chart), 1244.00 (ЕМА200 on the daily chart) and 1218.00 (Fibonacci 23.6%).
Consolidation of the price below these levels may trigger further decline in the pair XAU/USD and resumption of the downtrend, which began in October 2012.
Support levels: 1324.00, 1316.00, 1300.00, 1264.00, 1244.00 and 1218.00.
Resistance levels: 1370.00, 1385.00, 1400.00, 1410.00, 1435.00 and 1500.00.
Buy Stop: 1340.00. Stop-Loss: 1323.00. Targets: 1365.00, 1385.00, 1400.00, 1410.00, 1435.00 and 1500.00.
Sell Stop: 1323.00. Stop-Loss: 1335.00. Targets: 1316.00, 1300.00, 1264.00, 1240.00 and 1218.00.
Support levels are 1324.00 and 1316.00
Stochastic gives signal to buy