Gold price remains near its highs and near the 38% retracement. Price makes higher highs and higher lows as short-term trend remains bullish. However I feel that selling pressures will come back and push price to new lows again. I believe this upward bounce from the support at $1,180 is corrective in nature and that the main down trend will soon resume.
Red line = resistance
Blue line=support
Gold price is above the Ichimoku cloud in the 4-hour chart and exactly at the 38% retracement from the decline that started at $1,322. This upward bounce is most probably a corrective bounce that will soon end. The maximum level for this bounce to be considered as corrective is the $1,255 price level. I do not believe we will see that level. I believe that Gold price will soon break below short-term support at $1,225. Cloud support is found at $1,200. If broken we will have confirmation that we should expect new lows below $1,180.
Red line= support trend line
The 30-minute chart above shows the higher highs and higher lows Gold price is currently making. The overlapping structure of the rise is a characteristic of corrective patterns. I expect trend to turn bearish again soon. I will get that bearish signal once the red trend line support is broken and once we make a lower low. This means that Gold price should break below $1,225. My longer-term target remains at $1,050-$1,000. In the short-term I'm neutral as long as price is above the red trend line. I prefer taking short positions when and if price breaks below support and below the cloud.
The material has been provided by InstaForex Company - www.instaforex.com
