IFC Markets - Analytics

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Technical Analysis XAUUSD : 2015-06-02

Do they exchange rubles for gold?

Today we present you the new &XAURUB personal composite instrument. It reflects the gold price, quoted in the rubles, or the gold ounce value in the Russian currency. From 2011 to 2014 XAURUB had been traded in the range from 39700 to 55700. Last summer the PCI rallied due to the ruble collapse and recorded a significant pullback. We believe that gold quotes are supported by the uncertainty about Fed rate hike and Greek default risks. American economy has not yet engaged in sustainable recovery. Particularly, in late May analysts cut the first quarter GDP forecast. Factory Orders slipped by worse-than-expected 0.4% on Tuesday, resulting in the weakening dollar and expanding gold. As for the ruble, it shows little response to global Forex market trends. The ruble falls to a large extent because of Russian Central bank, canceling foreign currency repo auction.

PCI

On the daily time frame XAURUB:D1 switched the downtrend to a neutral one. At the same time it crossed the 200-day Moving Average, which has a clear positive slope. Bollinger Bands remain narrow, probably indicating low volatility. They are apparently inclined upwards as well. The PCI is now trying to breach the upper Bollinger band. The MACD bars have been above the zero and the signal lines for a long time, designating a bullish momentum. We believe it may intensify, if the bars cross the zero line. Parabolic has been giving buy signals. RSI-Bars has been moving up, shaping ascending divergence. It broke out the 50 level long ago, but has not yet reached the overbought zone. We assume that the bullish momentum may continue after the next XAURUB bar closes above the upper Bollinger band and two fractal highs that haven't been passed so far – at the 64000 mark. A stop loss may be placed below the six latest fractal lows, the Parabolic signal, the Bollinger line and the neutral trend bottom – at 58800. Unfortunately, we have an exceedingly wide range, which is equal to the neutral trend amplitude. After pending order activation the stop loss is supposed to be moved every four hours near the next fractal low, following Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most careful traders may switch to the H4 time frame and place a stop loss, moving it after the trend. If the price reaches the stop without triggering the order, we recommend to remove the position: the market sustains internal changes that were not considered.

 

Position Buy
Buy stop above 64000
Stop loss below 58800


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