XAU/USD: gold strengthening on 18.09.2015

September 18, 2015

Current trend

The price of gold is growing to local highs amid the weakness of the USD, which failed to gain any support from the Federal Reserve. At the same time, there are no surprises that the Regulator decided to keep US interest rates unchanged.

However, before the Fed's decision was announced, positive labor market statistics were released in the US. The number of Initial Jobless Claims declined from 275K to 264K. Current Account registered a surplus of $109.7 billion against a forecasted deficit of $111.3 billion.

Support and resistance

Bollinger Bands indicator on the daily chart is turning horizontally. The price range has narrowed down at the top. MACD is growing and keeping a strong buy signal. Stochastic is approaching the border of the overbought zone that indicates a decline in the bullish sentiment.

According to the indicators, long positions are still valid, however, new positions should not be opened right now.

Support levels: 1126.50, 1121.63, 1115.70, 1110.00, 1105.50, 1101.05, 1098.50 (11 September local low).

Resistance levels: 1134.30 (near 17 September local high), 1140.53, 1147.66 (1 September high), 1156.40, 1166.20, 1169.81 (24 August high).

Trading tips

Long positions can be opened after the breakout of the level of 1134.30 (with the appropriate indicators signals) with targets at 1141.50, 1145.50 and stop-loss at 1125.00. Validily - 2 days.

Short positions can be opened after the breakdown and consolidation below the level of 1126.50 with the target at 1117.50 and stop-loss at 1130.00. Validity - 1-2 days.

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