The pair XAU/USD has failed to exceed two strong resistance levels 1260.00 (ЕМА200) and 1235.00 (ЕМА144) on the weekly chart.
The price of gold has been declining since the beginning of the trading day today. By the opening of European session the price has lost 1.5% due to decline from the level of 1235.00. On 4-hour chart the indicators OsMA and Stochastic give sell signals; on the daily chart the indicators are reversing towards the short positions. Breakdown of support level of 1193.00 (ЕМА50 on 4-hour chart) will trigger further decline and the pair XAU/USD will go back to the downward channel on the weekly chart with the upper limit at the level of 1170.00 and the bottom line of 1038.00.
If the price consolidates below support levels of 1135.00 (ЕМА200) and 1126.00 (ЕМА144 on the daily chart), the pair will go back to the downtrend.
However, with the rise of investors’ concern about the prospects of the global economy, demand for gold can increase. If the price consolidates above the level of 1260.00 (ЕМА200 on the weekly chart and ЕМА50 on the monthly chart), gold can resume uptrend, which we observed in the market before mid-2010.
Support levels: 1193.00, 1170.00, 1150.00, 1135.00 and 1126.00.
Resistance levels: 1235.00, 1260.00 and 1300.00.
Sell Stop: 1200.00.
Targets: 1193.00, 1170.00, 1150.00, 1135.00 and 1126.00.
Buy Stop: 1225.00.
Targets: 1235.00, 1260.00 and 1300.00.