XAU/USD is still trading within the cloud

July 9, 2014

XAU/USD, H4

Let’s look at the four-hour chart. Tenkan-sen line has crossed Kijun-sen from below, forming trend reversal pattern. However, the upward impetus wasn’t enough and the pair is still trading within the cloud.  Upper border of the cloud (1323.80) is a strong resistance level. Chinkou Span line is approaching the price chart from below; current Kumo-cloud is ascending. The closest support level is Tenkan-sen line (1319.53).

XAU/USD, D1

On the daily chart Tenkan-sen line is above Kijun-sen, the red line is directed upwards, while the blue one remains horizontal. Chinkou Span line is above the price chart, current cloud is ascending. The pair has left the cloud, but is still consolidating around Tenkan-sen line, which is now a support level (1320.99). The resistance level will be at one of the previous maximums of Chinkou Span (1334.65).

Key levels

Support levels:  1320.99, 1319.53.

Resistance levels:  1323.80, 1334.65.

Trading tips

On the four-hour chart the pair is still trading within the cloud, it’s not recommended to open new trades at current price. However, on the daily chart we’ve got a signal to buy. Pending long positions should be placed above1323.80 with targets around 1334.65.

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