XAU/USD: dollar weakened on the currency market _16/08/2016

Trading recommendations

Buy on the market. Stop-Loss 1323.00. Objectives 1365.00, 1385.00, 1400.00, 1410.00, 1435.00, 1500.00

Sell ​​Stop 1322.00. Stop-Loss 1335.00. Objectives 1316.00, 1300.00, 1264.00, 1240.00, 1218.00


Technical analysis

While the pair XAU / USD is above the support level of 1324.00 (38.2% Fibonacci level, EMA50 daily chart), the relevance of long positions is maintained.

In case of breaking this level will perform the following levels of support levels of 1264.00 (EMA144 on the daily chart and EMA200 on the weekly chart), 1244.00 (EMA200 on the daily chart), 1218.00 (23.6% Fibonacci level).

Fixing prices below these levels will create conditions for further reducing the XAU / USD pair and return to the downward global trend, which began in October 2012.

On the weekly chart the pair XAU / USD remains within the ascending channel with the upper border, passing near 1385.00 levels (peaks 2014), 1410.00 (50.0% Fibonacci level of the correction to the wave decline from October 2012). The pair XAU / USD is above 1324.00 (Fibonacci level of 38.2%), and positive momentum is maintained.

Indicators OsMA and Stochastic on the 4 hour chart have moved over to the buyers on the daily chart - are also deployed on long positions.

Weak US economic indicators, the Fed restraint on further interest rate rises in the US, the risk on the state of the world economy, and the prospect of further easing of monetary policy in a number of the world's central banks will contribute to the preservation of demand for gold.

Support levels: 1324.00, 1316.00, 1300.00, 1264.00, 1244.00, 1218.00

Resistance Levels: 1370.00, 1385.00, 1400.00, 1410.00, 1435.00, 1500.00


Overview and Dynamics

Weak data on retail sales in the US in July, for the second quarter GDP and labor productivity, published earlier last week, significantly weakened the likelihood of higher interest rates in the US in the coming months.

So, the probability of increasing rates in the US in September, is currently estimated at 12%. The probability of interest rate increase in December is also reduced, being at around 40%.

The WSJ dollar index, which tracks the greenback against a basket of other currencies, was down 0.2%, to 86.18.

The outcome of last week was the growth of the American stock indices, rising oil prices, the weakening of the dollar against most currencies.

Last Thursday, the first time since December 31, 1999, all three indices DJIA, S&P500, Nasdaq reached record levels in one day. S&P500 closed at a record high for the ninth time this year, and the DJIA - in the eighth.

On Monday, the president of the Federal Reserve Bank of San Francisco John Williams said the Fed should either increase the target level of inflation, which currently stands at 2%, or start using a new benchmark, based on the prices or the economic growth levels. A higher target inflation rate may give the Fed more room to save the interest rates at current levels.

This indicates a lack of consensus among the members of the Fed's leadership on the issue of raising interest rates in the United States.

Comments John Williams led to a large-scale reduction of US dollar in the Asian session on Tuesday. Quotes of gold rose today to $ 10 to the level of 1350.00 dollars per ounce.

Risks with respect to the global economy, as well as lower interest rates in a number of the world's central banks with the prospect of further easing of monetary policy will support the gold price.

The urgency of long positions on gold is also stored on the back of weak US economic data and the Fed's restrained position on raising interest rates.xuh4