17, October 2016

XAU/USD (a 4-hour chart)

General overview

Gold prices weakened against the US dollar due to the strong US Retail Sales and Producer Price Index.

Current situation

Gold prices traded sideways during the European session amid lack of market movers on Friday. The yellow metal went back and forth in a range. A recovery towards the level 1260 switched to a decline back to 1250 dollar per ounce. The price was unable to break the 100-EMA in 1 hour chart. The line rejected the XAU/USD pair downwards. Gold futures moved below 50-EMA which provides a current resistance for the price. The 50, 100 and 200 EMAs extended their decline in the same chart. The resistance is at 1260, the support comes in at 1250 dollar per ounce.

MACD remained in the negative area. MACD decreased which confirms the sellers’ strength. RSI indicator consolidated near oversold levels.

Trading recommendations

A break above 1260 dollar per ounce would open the way to 1270. Alternatively, a move below the immediate support would suggest a resumption of the bearish trend towards 1240 dollar per ounce.