Gold Technical Analysis - Gold Trading: 2015-05-13

Gold up as US dollar index slumps

On Wednesday XAUUSD showed robust growth, rising above $1200 per ounce, meanwhile the greenback slipped. The US dollar index slumped to the 3-month low amid investors’ expectations that the Fed might raise the rate only in December and not in July or October, as planed earlier. The rescheduling was the result of weak US economic performance. In particular, Retail Sales in April released on Wednesday remained unchanged while market participants anticipated at least a 0.2% rise. We may expect gold prices to growth further if the US dollar continues to weaken and the Greek default probability increases. Especially important US statistics is not published on Thursday, and on Friday it may be positive, according to preliminary estimates.

The XAUUSD:D1 chart is trying to escape the sideways trading, climb further and cross the moving average (200). On Wednesday, the price exceeded the last fractal high at 1215. Parabolic indicator formed a signal of upturn. RSI-Bars are close to the level of 50, preparing to overcome this mark. We deem that a bullish momentum might be formed after the price breaks the next fractal high, the upper Donchian Channel boundary and the moving average (200) at 1222-1224: a pending buy order may be placed at this level. Stop loss is to be placed near the local fractal low level, which can currently be used as a support line at 1179. After pending order placing, Stop loss is to be moved every four hours to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most careful traders can switch to the H4 timeframe after order execution, placing Stop loss and moving it according to the price direction. If the price meets the Stop loss level without reaching the order, we recommend cancelling the position: the market sustains internal changes which were not considered.