XAU/USD: the Price is Going to the Lower Limit of the Ascending Channel - Technical Analysis of 17.05.2016

XAU/USD: the Price is Going to the Lower Limit of the Ascending Channel - Technical Analysis of 17.05.2016

17 May 2016, 19:29
Roberto Jacobs
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XAU/USD: the Price is Going to the Lower Limit of the Ascending Channel - Technical Analysis of 17.05.2016

Review and dynamics
Since the beginning of this year the price of gold has grown by 24% from the level of 1048.00 USD per ounce amid uncertainty in the global financial market and slowdown of economic growth in the world.The rise in price was the highest over the past 30 years.

The pair XAU/USD is now above important support level of 1257.00 (ЕМА200 on the weekly chart), remaining in the ascending channel on the daily and weekly charts with the upper limit at the level of 1323.00 (Fibonacci 38.2% to the wave of decline since October 2012).

Our opinion
On the daily and 4-hour charts the indicators OsMA and Stochastic give sell signals; on the weekly chart the indicators are reversing towards the short positions.

In case of breakout of support level of 1257.00 (ЕМА200 on 4-hour and weekly charts), the price will go to 1238.00 (ЕМА144 on the weekly chart). Slightly below this level, we can see the lower limit of the ascending channel on the weekly chart. If the price consolidates below support level of 1218.00 (Fibonacci 23.6%) downtrend can resume and in the medium-term it will be advisable to open short positions on the pair XAU/USD.

As an alternative scenario the price can resume growth in the ascending channel on the weekly chart with the target of 1300.00 and 1323.00 (Fibonacci 38.2%).

Support levels: 1257.00, 1238.00, 1218.00 and 1185.00.
Resistance levels: 1300.00 and 1323.00.

Trading tips
Buy Stop: 1280.00. Stop-Loss: 1270.00. Targets: 1300.00, 1323.00, 1360.00 and 1385.00.
Sell Stop: 1265.00. Stop-Loss: 1275.00. Targtes: 1257.00, 1250.00, 1238.00, 1218.00, 1210.00 and 1180.00.


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Reduction to the level 1257.00

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