XAU/USD: the breakdown of the key support level of 1218.00. Technical Analysis.

XAU/USD: the breakdown of the key support level of 1218.00. Technical Analysis.

21 November 2016, 11:35
Yuri Papshev

Trading recommendations

Buy Stop 1220.00. Stop-Loss 1210.00. Objectives 1234.00, 1250.00, 1264.00, 1275.00

Sell ​​in the market. Stop-Loss 1220.00. Objectives 1203.00, 1160.00, 1100.00, 1048.00


Overview and Dynamics

Against the background of large-scale strengthening of the dollar in the foreign exchange market, after a victory Trump, the price of gold fell sharply, breaking through key support levels of 1264.00 (EMA200 the daily and weekly charts), 1218.00 (lower line of the descending channel on the weekly chart and Fibonacci level of 23.6% correction to the wave decline from October 2012). Despite the observed correction in the currency market since the start of today's trading day, the pressure on the gold stored in anticipation of an early interest rate increase in the United States.

 On the weekly, monthly charts indicators OsMA and Stochastic are on the side of the sellers. Break of the support level creates the preconditions for the further decrease in pair XAU / USD and return to the downward global trend, which began in October 2012. Nevertheless, you should pay attention to indicators OsMA and Stochastic, which at the 4-hour and daily charts deployed on long positions, signaling the overdue upward correction. The objectives may be levels of 1218.00, 1234.00 (EMA200 the 1-hour chart, EMA50 on the 4-hour chart), 1250.00 (October lows).

Alternative scenario implies an increase in XAU / USD pair to the key level of 1264.00. And only in the case of consolidation above 1275.00 level, you can revert to the long positions in the pair XAU / USD. Break of the resistance level of 1275.00 will create prerequisites for the growth to the levels of 1305.00, 1324.00 (Fibonacci level of 38.2%), 1350.00, 1370.00, 1385.00, 1400.00.

So far, the actual look short positions. After fixing the lower level of 1203.00 distant goals of reducing the XAU / USD pair are levels 1100.00(EMA144), 1000.00 (EMA200 monthly chart).

 Support levels: 1203.00, 1160.00, 1100.00, 1048.00, 1000.00

Resistance levels: 1218.00, 1234.00, 1250.00, 1264.00, 1275.00, 1305.00, 1324.00, 1350.00, 1370.00, 1385.00, 1400.00

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*)presented material expresses the personal views of the author and is not a direct guide to conduct trading operations.      

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