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Morning Market Update – XAU/USD

By:
Sylvester Stephen
Updated: Jul 17, 2017, 07:15 UTC

XAU/USD looks like it’s bouncing higher after failing to break below the 1212.08 handle. As seen on the four-hour time frame chart, the bounces from the

Gold

XAU/USD looks like it’s bouncing higher after failing to break below the 1212.08 handle. As seen on the four-hour time frame chart, the bounces from the support areas have been solid since May. Though the support areas were broken initially, the pair managed to quickly bounce back strongly above the support zone.

What makes this setup even more interesting is that the stochastic is around 83.0 areas. The pair is currently testing the area of interest at 1231.52 levels. Therefore, there is a higher chance for the resistance to form here and send the pair to the downside again. An opportunity to jump onto the new trend has emerged and it will be interesting to see the levels which currently align with 100SMA. A break of the moving average will confirm that the trend will stay here some time. Meanwhile, we could also wait for the pair to actually make some lows and retest the 50EMA to confirm a new trend.

If there is a buying interest beyond resistance, the recovery could get extended towards the very important 100-day SMA region. A convincing move beyond the key 50-day EMA hurdle was seen rallying towards a strong horizontal resistance.

The price resumes the positive attempts and fluctuates near the critical resistance level. Breaching this level is considered to be the most important motive to reinforce our bullish trend continuation scenario.

At the same time, we must be aware that any stability above 50EMA is considered to be the major factor which initially targets our levels. As we mentioned earlier, holding above this levels will be the confirmation factor for more bullish trading on the intraday. The price action is developing a possible expanding channel and support could be gained around 1223.47 levels.

A bullish divergence is joining along the volumes, and indicates a good sign that the bulls might be preparing for a rally. On the flip side, 1223.071 levels seem to protect the immediate break below which would turn vulnerable and head back towards new lows of support near the 1205- 1200 round figure mark.

The expected trading range for today is between 1223.07 levels of support and 1239.20 resistances.
For more detailed analysis from the author, please visit NoaFX.

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