XAU/USD: gold strengthening on 11.08.2015

August 11, 2015

Current trend

In the beginning of this week, gold prices significantly grew and strengthened an upward movement that was trying to develop since the middle of last week.

The reason of the growth is the weakening in the USD, which fell after the publication of July NFPR in the US that failed to fully satisfy market expectations. At the same time, experts agree that the USD weakening is unlikely to last for long, as the probability of the interest rate hike in the US is high. The Fed President in Atlanta, for example, stated that NFPR results are sufficient to increase the interest rate in September.

Support and resistance

The price range of Bollinger Bands remains narrow, but the indicator formed a sell signal as the price has left the top border of the range. MACD is growing. Stochastic is growing too but is approaching the overbought zone, which could indicate a slowdown in the upward trend.

Support levels: 1094.50, 1087.00 (4 August low), 1080.70, 1077.20 (24 July low).

Resistance levels: 1101.60 (local high), 1105.50, 1110.00 (20 July high), 1119.00, 1134.30, 1146.80, 1156.40, 1166.20 (9 July high).

Trading tips

Open long positions after the breakout of the levels of 1101.60, 1105.50, 1111.00 with the target at 1119.00 and stop-loss at 1094.50.

Short positions can be opened after the breakdown and consolidation below the level of 1094.50 with targets at 1080.70, 1077.20 and stop-loss at 1101.60.

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