Gold strengthened on Wednesday on the back of the weak dollar

August 11, 2016

Gold strengthened on Wednesday on the back of the weak dollar and decreased expectations that the Federal Reserve will have a rate hike in the upcoming months.

Current situation

The pair had a moderately positive day on Wednesday. Gold sharply rallied and set a new local high at 1356 where the pair turned down and erased some of its gains. The resistance is seen at 1350, the support stands at 1330.

MACD indicator is at the centerline. If the histogram enters the positive territory, that will indicate buyers’ growing strength. If MACD returns into the negative area the sellers will take control over the market. RSI bounced from the overbought area.

The price spiked from the 50-EMA in the 4 hours chart. However, it returned back to the 50-EMA later the day. Now the 50-EMA acts as a support for the XAU/USD. The 50, 100 and 200 EMAs are moving upwards.

Trading recommendations

The growing impulse faded and Gold returned to a decrease. If the price remains below 1357 the instrument will continue its downward trajectory. Alternatively, buyers will lead the price to the resistance at 1370.

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