Gold Slightly Down, Recovers Earlier Losses - 25 September 2018

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Gold prices ended a two-sided trading session slightly lower Monday as the dollar strengthened on heightened trade tensions between the United States and China. The world’s two largest economies imposed a new round of tariffs on each other’s goods. Attention now turns to the Federal Reserve’s policy meeting that begins today and ends Wednesday afternoon with a statement. Fed Chair Jerome Powell will have a press conference following the meeting.

From a chart perspective, trading below the weekly Ichimoku clouds suggests that the bears have the overall technical advantage, but prices have been trading sideways for the past month. The Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-period moving average, green line) are flat on the daily chart and the Chikou-span (closing price plotted 26 periods behind, brown line) is above prices.

XAUUSD Daily

To the upside, the initial resistance sits at 1204, and that is followed by 1208, the 23.6% retracement of the bearish run from 1365.10 to 1160.05. If XAU/USD passes through 1208, then the next stop will be 1214-1212.40. The bulls have to produce a daily close above 1214 to challenge 1218. The bears, on the other hand, have to push prices below 1195 to revisit the 1192/0 area. A break down below 1190 implies that the market is targeting 1187 or even 1184. Below there, the 1182-1180.50 stands out as a strategic technical support.

XAUUSD h4

 

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Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.