Yesterday, gold was strengthened after the speech by Janet Yellen. In her speech, the head of the American regulator stressed that the next tightening of monetary policy depends directly on the statistics of labor market and real estate, as well as on the growth rate of inflation in the United States. At the same time Yellen highlighted the opinion of most members of the committee that delay of the interest rates raise would be unwise.
In addition, precious metals received support from the news of resignation of Michael Flynn. The adviser of US President for National Security admitted that he discussed the sanctions against Moscow with Russian ambassador before Trump entered the office. This news may serve as growth driver for XAU/USD in the medium term, as now, market participants are afraid of failure of Trump's plans to reduce the tax burden and to increase budget expenditures.
Today traders will pay attention to the publication of macroeconomic statistics on the US real estate, as well as on the US labor market. If both indicators will be positive for the US economy, the Fed will receive a strong signal to raise interest rates, which would support the dollar.
Support and resistance
On the daily chart, the pair is trying to gain a foothold above the level of 1236.00. The indicator "Bollinger Bands" is directed upwards, and the price range continues to expand, reflecting the continuation of the current trend. Histogram of MACD is in the positive zone, giving a buy signal. Stochastic is approaching the overbought area.
Support levels: 1226.07, 1217.71, 1206.37, 1195.62.
Resistance levels: 1236.66, 1247.57, 1258.32.
Long positions should be opened at the current price with the targets at 1240.70, 1244.30 and stop loss at the level of 1230.00. Implementation period: 1-2 days.
Short positions can be set at the level of 1230.50 with take profit at 1219.00 and stop loss at 1237.80. Implementation period: 1-2 days.