Gold remains inside trading range, back tests cloud resistance

Gold price reached our first target after breaking below the triangle pattern. Price reached the lower trading range boundary and then bounced strongly towards cloud resistance. Next week is very important. Will we see a rejection or a break out?

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Red lines- trading range

Gold price bounced strongly on Friday after reaching the support zone around $1,670. We warned during the week that a move towards the first support level of $1,670 was very possible specially if price were to break $1,690-$1,700. Price reached that level and is now back testing the Kumo (cloud). Here at $1,700 we have important resistance. Trading below the cloud implies that short-term trend is bearish. A rejection therefore will confirm that bears have control of the short-term trend and could lead to a new move lower towards $1,630-$1,600. On the other hand if bulls manage to penetrate the cloud and break above $1,710-20 then we could see a move towards $1,740-50 come fast. Monday's session is very important for the short-term move in Gold.

The material has been provided by InstaForex Company - www.instaforex.com