Gold price continues to trade above the important support of $1,275 and is now challenging the downward sloping trend line resistance at $1,291. If this trend line resistance is broken, I expect Gold price to move higher towards its next resistance of $1,305. If that resistance is broken as well, then Gold price should continue higher towards $1,330-40.
Gold price remains below the Ichimoku cloud. Trend is down. The decline from $1,331 is not impulsive yet. Three waves down have unfolded from $1,331, so a break above 1,305 will confirm this decline of wave B, and chances for wave C towards $1,340-50 will increase substantially. If price breaks resistance at $1,305, it will also have moved above the short-term Ichimoku cloud. This will be an added bullish signal in the setup.
Support at $1,275 is very important. If broken, Gold price is expected to fall towards $1,200 very fast. Longer-term target is $1,100. Our strategy is to wait for $1,340-50 to go short with $1,391 stop or when support at $1,275 fails.
The material has been provided by InstaForex Company - www.instaforex.com
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