Gold prices although managed to make a new higher high above $1,256, it did not manage to move much higher or touch the important resistance at $1,270. Prices look like they are taking another turn down and we should be very cautious as a short-term sell signal could be triggered once the purple trend lines are broken. The purple trend lines provide support as shown in the following chart.
Short-term support is found at $1,240. Breaking below that level will mean a possible trend reversal and important top could be in place. The short-term bullish trend will change to bearish once the last low at $1,234 is broken downwards. Currently the short term trend remains bullish as prices make higher highs and higher lows. Cancelation of this pattern will mean trend reversal. So going short when prices break $1,240-34 is our preferred strategy.
The daily chart above shows us that prices have reached important resistance levels on a daily level. The time is right for a trend reversal and a new downward move to start. Breaking below $1,230 on a daily level will confirm this trend change. Our longer-term target of $1,140 remains valid.
The material has been provided by InstaForex Company - www.instaforex.com
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