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XAU/USD: on strong resistance levels on 04.03.2016

Gold went up from the level of 1063.00 rising in price by 18%. Due to yesterday’s negative US news, spot price broke down strong resistance level of 1258.00 (ЕМА200 and upper line of the descending channel on the weekly chart and ЕМА50 on the monthly chart).

During today’s European session the price continues to rise; however, Stochastic on the weekly chart is in the overbought zone. On the daily charts OsMA and Stochastic do not give clear signals. On the 4-hour chart the indicators are ready to reverse towards the short positions. In this situation it is better to refrain from buying gold. Safe sell positions can be opened if the price goes back below the levels of 1238.00 (ЕМА144 on weekly chart) and 1218.00 (Fibonacci 23.6%).

If today’s data on the US NFPR will be above the forecast of 190 000 new jobs, the price of gold will go down. The speed of decline and further movement will depend on NFPR index.

In case of consolidation of the price below the level of 1200.00, the price of gold will go back to the descending channel with the bottom limit below the level of 1050.00.

In case of the opposite scenario the price will go up to 1300.00 (highs of 2015), 1323.00 (Fibonacci 38.2%), 1385.00 (highs of 2014), 1435.00 (highs of 2013). Gold will go back to the uptrend, which had lasted until mid 2010.

Support levels: 1258.00, 1238.00, 1218.00, 1200.0, 1150.00, 1061.00 and 1048.00.
Resistance levels: 1300.00, 1323.00, 1385.00 and 1435.00.

Trading tips

Sell Stop: 1250.00. Stop-Loss: 1265.00. Targets: 1238.00, 1218.00, 1200.0, 1150.00, 1061.00 and 1048.00.
Buy Stop: 1282.00. Stop-Loss: 1258.00. Targets: 1300.00, 1323.00, 1385.00 and 1435.00.

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