Yesterday the XAU/USD pair rose to a level of 1250.85, updating 4-month maximum, due to the release of weak US unemployment data. The number of initial claims month increased from 238K to 244K. The negative statistics on the labor market significantly reduces the likelihood of interest rate hike at the March meeting of the Fed. Thus, the market expectation regarding the imminent tightening of monetary policy is assessed as very low, which contributes to the strengthening of the precious metals.
Today traders are waiting for the stats on new home sales in the US. The Head of the Fed has stated that the statistics on sales of new homes was an important element in the decision on the interest rate.
Support and resistance
On the daily chart, the pair is approaching the upper boundary of "Bollinger Bands" from below. Indicator is directed upwards, and the price range is narrow, indicating a high probability of change of the current trend. Histogram of MACD is in the positive zone, maintaining a buy signal. Stochastic is going to enter the overbought zone.
Support levels: 1247.36, 1235.44, 1229.35, 1216.16.
Resistance levels: 1256.53, 1264.87, 1272.49.
Short positions should be opened at the level of 1254.00 with the targets at 1243.00 and a stop-loss at the level of 1257.10. Implementation period: 1-2 days.
Long positions can be opened at the level of 1257.50 with targets at 1264.70 and a stop-loss at the level of 1252.50. Implementation period: 1-2 days.