Gold price made a fake breakout yesterday and a sharp reversal below $1,160. Prices reached $1,152 with volatility spiking. Gold price is in a corrective phase that can bring the precious metal back in the area of $1,140-20. A new up trend similar to the rise from $1,100 to $1,190 should then follow.
Green rectangle – impulsive move
Blue rectangle – corrective area
Blue line – price projection
Gold price is trading below the Ichimoku cloud and near the 38% Fibonacci retracement. A trend is neutral as gold price is in a corrective phase as depicted in the chart. Once this phase is over, we should see the resumption of the up trend towards $1,200 and higher. Support is at $1,140-20 and we should start turning bullish again once the stochastic enters the oversold area.
The weekly candle remains above the kijun-sen. A break below it will imply more downside should be expected at least towards the tenkan-sen.
The material has been provided by InstaForex Company – www.instaforex.com