Gold price recently broke out of the triangle pattern it was trading inside and provided us with a bullish signal. Since the $2,005 break out, Gold is in bullish mode making new higher highs relative to the mid April highs. The RSI is providing bearish divergence warnings. The new higher high was so far not accompanied by strength. The daily candlestick so far has a long upper tail. This is a sign of weakness. Combined with the bearish RSI divergence, the chances for a move lower have increased. Gold price justifies a similar pull back to that from February. We believe that a move towards $1,950 is very possible over the coming weeks. Tomorrow’s NFP could signal the start of such a reversal. Price remains inside the medium-term upward sloping channel and even a pull back towards $1,950 does not cancel the bullish momentum.
The material has been provided by InstaForex Company – www.instaforex.com
Black lines- bearish RSI divergence
Blue lines- bullish channel
Red lines- bearish channel
Green line- key support
Gold price recently broke out of the triangle pattern it was trading inside and provided us with a bullish signal. Since the $2,005 break out, Gold is in bullish mode making new higher highs relative to the mid April highs. The RSI is providing bearish divergence warnings. The new higher high was so far not accompanied by strength. The daily candlestick so far has a long upper tail. This is a sign of weakness. Combined with the bearish RSI divergence, the chances for a move lower have increased. Gold price justifies a similar pull back to that from February. We believe that a move towards $1,950 is very possible over the coming weeks. Tomorrow’s NFP could signal the start of such a reversal. Price remains inside the medium-term upward sloping channel and even a pull back towards $1,950 does not cancel the bullish momentum.
The material has been provided by InstaForex Company – www.instaforex.com
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