Technical analysis of Gold for March 30, 2016

Gold prices bounced yesterday towards our target area of $1,235-40 as expected by our analysis. Gold has now reached an important short-term resistance. If the price manages to break above $1,250 we could even see new highs towards $1,300. Otherwise we should expect a break of $1,208 and new lows towards $1,190-$1,170.

Blue lines - bearish channel

Gold remains below the Kumo (cloud) and the stochastic oscillator has turned overbought. We could see a move a little bit higher closer to the upper channel boundary near $1,250 but this will be the main test. Only a clear break and close above $1,250 will help bulls make new highs. A rejection here will bring the price back to its recent lows and even lower.

There are bearish divergence signs on the weekly chart by the stochastic oscillator. The price, however, remains above the Kumo and the 38% Fibonacci retracement. The divergence signals imply that the pullback is not over. I expect Gold to make a big pullback towards the $1,150 area at least.The material has been provided by InstaForex Company - www.instaforex.com