XAU/USD: The price of gold slightly fell

January 25, 2016

Current trend

The price of gold slightly fell in the end of last week amid growing stock market that reduced an interest for safe-haven assets, such as gold. In addition, the pair was pressured by strong macroeconomic data from the US. The Markit Manufacturing PMI grew from 51.2 to 52.7 points while economists forecasted a fall to 51.1 points. In addition, Existing Home Sales rose by 14.7%, against a 10.5% fall in the previous month.

Support and resistance

Bollinger Bands on the daily chart us moving up while the price range remains quite wide. MACD is growing and giving a weak buy signal. Stochastic reached the overbought zone and is about to turn down.

The indicators recommend waiting for clearer trading signals.

Support levels: 1095.53 (local low), 1092.28 (21 January low), 1088.66, 1082.20 (19 January low), 1078.17, 1074.45, 1070.00.

Resistance levels: 1101.05 (local high), 1105.50, 1110.00 (20 January high), 1115.70 (4 November 2015 high), 1121.11, 1127.80.

Trading tips

Long positions can be opened after the breakout of the level of 1105.50 (with the appropriate indicators signals) with the target at 1114.50 and stop-loss at 1104.00. Validity – 2-3 days.

Short positions can be opened after the price rebound from the level of 1105.50 with targets at 1095.50, 1092.00 and stop-loss at 1111.00. Validity – 2-3 days.

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