Technical outlook:
The 4H chart presented here is indicative of clear 2-wave count potential. The first is being worked out between $1,180 and $1244.00 levels; it is an immediate boundary, being worked out. According to this wave count, strong support lies at $1,205.00, which is also Fibonacci 0.618 and immediate trendline support as depicted here. If the metal bounces from above levels, it is expected to rally towards $1,300.00 plus levels easily. The other wave count is possible if the prices break below $1,205.00 level and subsequently below the trendline support. In this cast the entire rally from $1,120.00 through $1,375.00 level would come into play and the prices may drop towards $1,170.00 level before it finds support. Please note that the above is also Fibonacci 0.618 support and 2-month trendline support also passes through. A short-term wave count is also presented below on an hourly chart. Supports are lined up to $1,205.00 and $1,180.00 levels respectively.
Trading plan:
A medium-term trading strategy remains bullish on the counter; keep buying on dips. Levels to watch out for are $1,205.00 and $1,170.00 respectively. Alongside an aggressive short-term trading plan would be on the sell side.
Aggressive:
Short now, stop at $1,246.00, and target $1,205.00.
Conservative:
Flat for now. Look to buy at $1,205 and $1,170.00, stop at $1,121.00, and target $1,375.00 plus.
Fundamental outlook:
Short-term pressure shall remain on Gold due to USD bullish scenarios. But the metal is overall in the medium-term bullish trend which can be nullified only if the prices drop below $1,122.00 level.
Events to watch out are Building Permits in the USA, scheduled to be out at 08:30 AM EST. Forecast is positive.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com