Gold continues to rise to new short-term highs, but we believe it is near the end of the upward move that started at 1,250. The rise seems completed, and we expect a reversal that could put the support levels at 1,300-1,280 to the test. Prices have risen in an impulsive way if we assume the final 5th wave is an ending diagonal as depicted by the red trend lines in the first chart below.
Prices are expected to turn downwards once the trend line from the lows and the red triangle are broken. This occurs at 1,343. If support fails, then we should expect a move at least towards 1,310-15. I believe the most probable target is 1,300-1,280. If the decline pauses at that area, then we should see an upward move to new higher highs. For now, we focus on the short side if prices break support. The first short-term support is found at 1,330-1,325 and then at 1,315-10.
The longer-term view is tricky. There are two possible scenarios. Scenario one is that we are forming the right hand shoulder in a bigger Head-and-Shoulders pattern. The formation of the right hand shoulder is under the first important blue resistance and will be confirmed if support at 1,250-54 is broken. This will open the way to new lows towards 1,140. The second scenario implies an upward impulsive move starting at 1,250, and now the second wave is about to retrace partialy this move. We expect a downward decline towards 1,300-1,280 and then a new upward thrust that will break the two blue important resistance levels to give new highs above 1,433.
The material has been provided by InstaForex Company – www.instaforex.com
Gold continues to rise to new short-term highs, but we believe it is near the end of the upward move that started at 1,250. The rise seems completed, and we expect a reversal that could put the support levels at 1,300-1,280 to the test. Prices have risen in an impulsive way if we assume the final 5th wave is an ending diagonal as depicted by the red trend lines in the first chart below.
Prices are expected to turn downwards once the trend line from the lows and the red triangle are broken. This occurs at 1,343. If support fails, then we should expect a move at least towards 1,310-15. I believe the most probable target is 1,300-1,280. If the decline pauses at that area, then we should see an upward move to new higher highs. For now, we focus on the short side if prices break support. The first short-term support is found at 1,330-1,325 and then at 1,315-10.
The longer-term view is tricky. There are two possible scenarios. Scenario one is that we are forming the right hand shoulder in a bigger Head-and-Shoulders pattern. The formation of the right hand shoulder is under the first important blue resistance and will be confirmed if support at 1,250-54 is broken. This will open the way to new lows towards 1,140. The second scenario implies an upward impulsive move starting at 1,250, and now the second wave is about to retrace partialy this move. We expect a downward decline towards 1,300-1,280 and then a new upward thrust that will break the two blue important resistance levels to give new highs above 1,433.
The material has been provided by InstaForex Company – www.instaforex.com
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