Gold price has broken through the medium-term trend line resistance and has successfully back tested it. Confirmation of the breakout will come now after the back test by breaking above $1,350 which is the most significant resistance level before the recent highs at $1,375.
Price has broken above the black trend line resistance and yesterday we saw a pull back that back tested the broken trend line. This pull back is absolutely natural and strengthens the bullish short-term trend if we break above $1,353. Support is at $1,340. Medium-term support is at the Ichimoku cloud at $1,322.
Gold price has broken above the weekly tenkan-sen (red line indicator) and shows that it has strength to continue higher if we also take into account the bullish reversal hammer candlestick from last week. Bulls got exactly what they wanted, a strong follow through and the last obstacle they mast surpass is the $1,350 level to be taken out on a weekly basis.
I remain a long-term bull as I have been saying since the last year that an important low at $1,045 is most probably a long-term reversal level. However a break below the red trend line and the Ichimoku cloud in the daily chart will imply that the correction of the entire rise is still not over and we could even see a pull back towards $1,200-$1,180. There is also an alternative scenario that is very very bullish Gold but it depends if we hold above $1,300. This scenario implies that we are in a nested 1-2-(1)-(2) wave count.
Key to all these scenarios is the $1,300 level. Thank you for taking the time to catch up on my thinking.
Have a nice day!!!
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.