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XAU/USD: technical analysis 07.01.20

Current trend

On the 4-hour chart, the instrument keeps a negative dynamic.
The price has tested the support level of 1555.21 and was slightly corrected upwards, but the general downward trend maintains. The breakdown of 1555.21 is needed to continue the downward dynamic. In this case, the next targets of sellers will be the level of 1551.19.

Alternative scenario

The upward rebound from 1555.21 support and pair’s sustained trading above 1562.50 will be a sign of upward correction formation and give a prospect of growth to the 1568.44 resistance. Additionally, the breakout of 1568.44 can accelerate the pair towards 1570.31 resistance which could restrict further rise.

Technical indicators

The technical picture is mixed.

Bollinger Bands are pointed upwards.

MACD volumes are decreasing in the positive zone, keeping a weak sell signal.

Stochastic’s lines are pointed downwards and are reaching the oversold area.

Support and resistance

Support levels: 1555.21, 1551.19, 1546.88.
Resistance levels: 1562.50, 1568.44, 1570.31.

Trading recommendations

Short positions can be opened below the level of 1555.21 with the target at around 1551.19 and stop-loss at 1556.50.
Long positions can be opened above the level of 1562.50 with the target at around 1568.44 and stop-loss at 1560.00.

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