Current trend

The XAU/USD pair is showing moderate growth, testing 1900.00 for a breakout. The instrument is developing an upward correction, which began in the area of the March lows.

In addition to technical factors, quotes are supported by macroeconomic statistics from the United States, where the day before traders drew attention to the decline in Existing Home Sales dynamics: in July, the indicator fell by 2.2% after -3.3% in the previous month. In turn, investors are in no hurry to open new positions in anticipation of today's publication of business activity data from S&P Global for August, and also because of the scheduled speech by US Federal Reserve Chairman Jerome Powell at the end of the week as part of the annual Economic Policy Symposium in Jackson Hole. Market "hawks" are expecting signals from the official to a possible resumption of interest rate hikes before the end of this year. At the moment, the probability of another 25 basis point adjustment before the regulator returns to the policy of reducing the cost of borrowing next year is estimated at 40.0%. The tightening of monetary conditions may be adopted in November, since analysts' forecasts regarding the September meeting of the Fed are almost unambiguous.

The period of correction continues in the market of gold contracts. According to the latest report from the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in gold amounted to 121.1 thousand, having decreased from 143.0 thousand a week earlier. The swap dealers balance amounted to 89.744 thousand for the "bulls" against 210.591 thousand for the "bears". Last week, sellers reduced the number of contracts by 23.544 thousand, and buyers decreased them by 1.300 thousand, signaling the continued fixation of short positions in the asset.

The pressure on the quotes of the instrument is exerted by the growing yield of US treasury bonds, which the day before reached 4.366% for 10-year securities, which is the highest value since November 2007.

Support and resistance

On the D1 chart Bollinger Bands are trying to reverse horisontally. The price range is narrowing, reflecting a change of trend in the ultra-short term. MACD indicator is growing, having formed a new buy signal (located above the signal line). Stochastic grows more steadily and is rapidly approaching its highs, which reflects risks of the overbought instrument in the ultra-short term.

Resistance levels: 1907.02, 1915.00, 1923.06, 1930.00.

Support levels: 1900.00, 1892.75, 1880.00, 1869.49.

Trading tips

Long positions can be opened after a breakout of 1907.02 with the target of 1923.06. Stop-loss — 1900.00. Implementation time: 1-2 days.

A rebound from 1907.02 as from resistance, followed by a breakdown of 1900.00 may become a signal for opening of new short positions with the target at 1880.00. Stop-loss — 1910.00.