By IFCMarkets

Good afternoon, dear traders. Here we consider the XAU/USD (GOLD) behavior on the daily chart. The price is located within the weeklong consolidation area limited by the triangle. This encourages us to focus more on the oscillators’ analysis which caters for leading signals of the sideways range. At the moment the bullish trend is observed for RSI-Bars(13) with the temporary correction. Weekly and daily price trend channels confirm the direction. Additional acceleration into the green zone can be produced after fractal resistance intersection at 1346.98, which is confirmed by historical values and 30-day resistance of DonchianChannel. This mark can be used to open a pending buy order with risk fixation at 1290.16. In this case, the ParabolicSAR reversal is expected. Besides, there is a high probability that this key level breach will result in leaving the triangle and entering into the green zone. After that the stop loss orders on short positions will be executed, which results in panic buying.

It should not be excluded a possibility of scenario in which the daily trend persistence proves to be insufficient for the triangle breach. In this case, the correction that has a chance to overcome the weekly support line of the triangle is expected: this support line is less important than the monthly one. Conservative traders should ensure that this last support of the RSI-Bars oscillator is destroyed: it is circled in red ellipse on the chart. It makes sense to start selling after passing the level at 1251.36 into the red zone. This mark is confirmed by historical indicator values of ParabolicSAR and DonchianChannel.

After two pending orders opening, we expect the first of them to be executed and the opposite position to be closed: let the market chaos decide the behavior. After position opening, Trailing Stop is to be moved after the ParabolicSAR values, or near the next fractal peak (trough, in case of long position). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Market Analysis provided by IFCMarkets