Weak economic data bearish for Australian dollar
Improving US economic performance and higher likelihood of a third rate hike in 2017 are bearish for gold. Will XAUUSD continue falling?
TheXAUUSD: D1 is retracing lower after hitting 13-month high in the beginning of September on the daily chart.
- The Donchian channel indicates no trend yet: it is flat
- The MACD indicator is below the signal line and the gap is widening, this is bearish.
- The Parabolic indicator gives a sell signal.
- The stochastic oscillator has breached into the oversold zone, which is bullish.
We believe the bearish momentum will continue after the price closes below the lower Donchian boundary at $1277.61. A pending order to buy can be placed below that level. The stop loss can be placed above the fractal high at $1313.53. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop loss level ($1313.53) without reaching the order ($1277.61), we recommend canceling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis:
| Position | Sell |
| Sell stop | Below 1277.61 |
| Stop loss | Above 1313.53 |