XAU/USD: gold is slightly growing

Current dynamics

On Tuesday, the pair XAU/USD rose slightly, pushing away from the mid-August lows. The reason for the upward trend was the corrective mood on the dollar prior to the next report on the US labor market at the end of the week.

On Wednesday, the focus of investors’ attention will be tied to the ADP report on employment and speeches of the heads of the ECB and the Fed. Janet Yellen, however, is unlikely to provide any news, as the markets are already firmly convinced of the possibility of another interest rate hike in late 2017. At the same time, investors are also interested in a schedule of reducing the balance of the Fed.

Support and resistance

The indicator “Bollinger bands” on the daily chart is decreasing. The price range is narrowing, reflecting the multidirectional trading dynamics in recent days. In the short term, corrective growth is possible.

The MACD indicator began to grow, but still retains a sell signal (the histogram is below the signal line). It is necessary to wait for the formation of a “bullish” signal.

Stochastics also went into growth, bouncing of its minimum values. The indicators show that gold is oversold and an upward trend is possible in the short term.

Resistance levels: 1277.39, 1289.98, 1304.29.

Support levels: 1267.96, 1261.00, 1251.03.

Trading tips

To open long positions, you can rely on the reversal at the current price, followed by a breakout of 1277.39. Take profit – 1295.00. Stop loss – 1265.00. Term of realization: 2-3 days.

An alternative may be the return of “bearish” sentiment with a breakdown of 1267.96. Take profit – 1260.00-1258.00. Stop loss – 1270.00. Term of realization: 2 days.