XAU/USD: review and forecast
Current trend
Recent FOMC decision to keep interest rate at the same level as well as the volumes of QE program has given a major impetus to commodity market. Fed Reserve has also lowered the numbers of estimated economic growth, ensuring investors that stimulating monetary policy will go on.
Today the price of the instrument has consolidated around the level of 23.6% of Fibonacci lines (1355.00). Further movement of the price will be determined by the fundamental data. However, China, the main consumer of the physical gold, has holidays and volumes of trading are decreasing.
Support and resistance
Important resistance level is the maximum of 11th of September (1368.00). If the price overcomes this level, the next obstacle for the Bulls will be psychological limit of 1400.00. The next target for the buy orders will be at 1415.50.
The pair is supported by the correction level of 23.6% of Fibonacci lines (1355.00). The next support level is 100-day MA at 1348.00. After breakdown of this level Bears will try to reach the level of 55-day MA (1338.00).
Trading tips
Without main consumer of the real gold the rise of the instrument is highly unlikely. Short positions with targets at support levels would be a wise choice.
Andrey Cherkas
Analyst of LiteForex Group of Companies