Gold price continues to trade sideways in a short-term neutral trend. The price remains above recent lows, and we can identify a possible inverted head and shoulders pattern being formed with the neckline at $1,105.
Green lines – IHS projection
Blue line – long-term trend line resistnace
Gold price continues to trade below the Ichimoku cloud and below the downward sloping trend-line resistance. Short-term resistance is found in the area of $1,104-$1,106 where the neckline and the Ichimoku cloud are found. Support is at $1,077.
Blue line – long-term broken support
Red lines – projection of price
The breakdown below the long-term trend-line support has produced an important sell signal with targets around $1,000. Gold price fell to $1,077 and bounced towards $1,100 again. This could be the start of a back to $1,130. A rejection at the level of $1,130 or lower will imply more downside should be expected. Bears should be very cautious as I see many chances for this back-test to happen.
The material has been provided by InstaForex Company – www.instaforex.com