XAU/USD: Pullback from the Level of 1300.00. Technical Analysis of 04.05.2016.
XAU/USD: Pullback from the Level of 1300.00. Technical Analysis of 04.05.2016.
Review and dynamics
On Monday, the price of gold broke out the level of 1300.00, reaching annual highs. However, closing price was lower than the opening price. On Tuesday the USD started to rise and today, the pair XAU/USD has been declining since the opening of the trading day.
At the end of trades at COMEX on Tuesday, June futures of gold fell by 0.3% to 1291.80 USD per troy ounce. By now, spot-price of gold in the pair XAU/USD fell to support level of 1280.00 (highs of March and recent resistance level).
Since the beginning of this year the price of gold has grown by 21% from the level of 1048.00 USD per ounce due to the increase in demand for gold as a safe-haven asset.
At the beginning of April the price pulled back from support level of 1218.00 (Fibonacci retracement of 23.6% to the wave of decline since October 2012) and, despite current decline continues to remain in the ascending channel on the weekly chart with the upper limit at the level of 1323.00 (Fibonacci 38.2%). The price has also broken up important resistance level of 1257.00 (ЕМА200 on the weekly chart).
Our opinion
Due to rise in the USD amid taking profit on the short positions prior to publication of NFPR on Friday, downward correction in the pair XAU/USD will continue. On 4-hour chart the indicators OsMA and Stochastic give sell signals; on the daily chart the indicators are reversing towards the short positions.
In case of breakout of support level of 1280.00 the price will go to 1257.00 (ЕМА200 on the weekly chart and the low line of the ascending channel on 4-hour chart).
However, only after consolidation of the price below the level of 1218.00 (Fibonacci 236%), it will be advisable to consider opening medium-term short positions in the pair XAU/USD.
Consolidation of the price below the level of 1180.00 (ЕМА200 on the daily chart) may bring the pair XAU/USD back in the downtrend.
Support levels: 1280.00, 1257.00, 1238.00 and 1218.00.
Resistance levels: 1300.00 and 1323.00.
Trading tips
Buy Stop: 1290.00. Stop-Loss: 1280.00. Targets: 1300.00, 1323.00, 1360.00 and 1385.00.
Sell Stop: 1277.00. Stop-Loss: 1286.00. Targets: 1257.00, 1250.00, 1238.00, 1218.00, 1210.00 and 1180.00.
The price remains in the ascending channel
At support level of 1280.00
