XAU/USD: gold continues falling

November 3, 2015

Current trend

In the beginning of this week, the price of gold continued falling. Gold remains under pressure amid increased expectations of an interest rate hike in the US before the end of the year.

In addition, data on Manufacturing PMI’s supported the USD on Monday. Index from Markit increased to half-a-year highs of 54.1 points that is slightly above expected 54 points. At the same time, index from ISM in October fell from 50.2 to 50.1 points that was still above the expectations.

Support and resistance

Bollinger Bands on the daily chart is moving down, while the price range is widening. At the same time, the indicator formed a signal for correctional purchases. MACD is falling. Stochastic is in the oversold zone and trying to turn up.

The indicators recommend waiting for clearer trading signals.

Support levels: 1132.52 (local low), 1127.80, 1121.11, 1115.70, 1110.00, 1105.50 (2 October lows), 1098.50 (11 September low).

Resistance levels: 1136.37 (local high), 1141.60, 1148.43 (end of October highs), 1152.15, 1156.40, 1162.56.

Trading tips

Long positions can be opened after the price consolidation above the level of 1137.10 with targets at 1147.00, 1156.00 and stop-loss at 1133.00. Validity – 1-3 days.

Short positions can be opened after the breakdown of the level of 1132.52 with the target at 1121.00 and stop-loss at 1136.00. Validity – 2-3 days.

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