During trading session on Monday, September, 25, gold prices significantly grew and stepped away from the local lows, renewed on September, 21. Despite the quite steady position of the US currency, the instrument could restore after the harsh statements of DPRK’s representatives, which provoked the new wave of risk escaping.
On Tuesday the investors are waiting for the head of Fed Janet Yellen’s speech, which can clarify the vision of the further growth of the interest rate in 2017. In addition, the market is waiting for the beginning of the Fed’s balance-sheet reduction program as early as October. The positive Yellen’s rhetoric can significantly weak the gold and return it to the month lows.
Support and resistance
On the daily chart Bollinger Bands are decreasing. The price range is actively narrowing, reflecting the “bullish” mood of the beginning of the week. The current indicators’ readings don’t contradict with the further development of the correctional dynamics in the short term.
MACD indicator is reversing upwards around the zero line, forming a buy signal (the histogram is above the signal line). According to the indicator’s readings, the growth of the instrument in the short term has some growth potential.
Stochastic is growing, too, but reaching the overbought area (over 80), which slightly restricts the “bulls” potential is the sort and very short term.
Resistance levels: 1315.65, 1325.65, 1334.32, 1343.98.
Support levels: 1304.29, 1287.80, 1280.23, 1273.85.
Long positions can be opened after the breakout the level of 1315.65. Take profit is 1334.32. Stop loss is 1304.29. Implementation period: 2 days.
The rebound at the level of 1315.65 can become the signal to open short positions with the target at 1300.00. The more long term positions can have a target at the level of 1287.80. Stop loss is 1322.00. Implementation period: 2-3 days.