On Thursday, the price of gold strengthened by 4% and reached its year highs. The price has been growing amid an increase in demand for safe-haven assets, such as gold and the Yen.
A recent press-conference with Fed’s Chair Janet Yellen has influenced price dynamics. The head of the Regulator noted that instability in global markets created serious risks for the country’s economy. The dovish rhetoric of the Fed eliminates the chance of a rate increase at the upcoming monetary policy meeting and significantly lowers the possibility of an increase during the first half of 2016.
Support and resistance
Bollinger Bands indicator on the daily chart is directed up. The price range is widening actively, but the price has been out of it for quite a long time. MACD is still keeping its strong upward trend. Stochastic is in the overbought zone and trying to turn down.
According to Bollinger Bands and Stochastic, a downward correction is possible. It is recommended to wait for clearer trading signals.
Support levels: 1232.29, 1221.79, 1210.25, 1200.67, 1191.21, 1181.29 (10 February low).
Resistance levels: 1248.00, 1263.05 (11 February high).
Long positions can be opened after the breakout of the level of 1248.90 with the target at 1263.00 and stop-loss at 1235.00. Validity – 1-2 days.
Short positions can be opened after the breakdown of the level of 1235.50 with the target at 1210.00 and stop-loss at 1250.00. Validity – 2-3 days.