Gold prices broke down yesterday from the upward sloping trend line that supported the short term uptrend at 1,331. The price fell towards the support at 1,315 and the fact that the price got rejected once again at 1,340-50 is a bearish sign. The price are moving downwards and bulls should be exited when it breaks below 1,331. On the other hand, bears win some time and will need to break below 1,300 in order to regain the upper hand in the short-term trend.
1,309 and 1,300 are important support levels. If this downward move is just corrective, we expect the downward pressures to stop near the two levels mentioned before. These levels are also the 50% and 61,8% Fibonacci retracements. If the price breaks below those two levels, I expect more downside and a test of the 1,270 lows.
Gold is trading inside a neutral zone according to our analysis and the best thing to do is to wait for a break out. Either 1,350 or 1,300 will confirm trend direction that we should follow. Traders with higher risk apetite would short the market once the 1,331 support failed with 1,350 stop. We still prefer the bearish scenario as the most possible outcome. We believe that Gold prices will once again come inside the longer-term downward sloping green trend channel and confirmation of the downtrend will come when the blue supportive trend line is broken.
Concluding, we still remain bearish biased as long as the price stays below 1,335 and 1,350. Our bearish scenario will strengthen if support at 1,300 fails. Bulls, on the other hand, could reconsider entering long once again when the price moves towards 1,310-1,305.
The material has been provided by InstaForex Company – www.instaforex.com
Gold prices broke down yesterday from the upward sloping trend line that supported the short term uptrend at 1,331. The price fell towards the support at 1,315 and the fact that the price got rejected once again at 1,340-50 is a bearish sign. The price are moving downwards and bulls should be exited when it breaks below 1,331. On the other hand, bears win some time and will need to break below 1,300 in order to regain the upper hand in the short-term trend.
1,309 and 1,300 are important support levels. If this downward move is just corrective, we expect the downward pressures to stop near the two levels mentioned before. These levels are also the 50% and 61,8% Fibonacci retracements. If the price breaks below those two levels, I expect more downside and a test of the 1,270 lows.
Gold is trading inside a neutral zone according to our analysis and the best thing to do is to wait for a break out. Either 1,350 or 1,300 will confirm trend direction that we should follow. Traders with higher risk apetite would short the market once the 1,331 support failed with 1,350 stop. We still prefer the bearish scenario as the most possible outcome. We believe that Gold prices will once again come inside the longer-term downward sloping green trend channel and confirmation of the downtrend will come when the blue supportive trend line is broken.
Concluding, we still remain bearish biased as long as the price stays below 1,335 and 1,350. Our bearish scenario will strengthen if support at 1,300 fails. Bulls, on the other hand, could reconsider entering long once again when the price moves towards 1,310-1,305.
The material has been provided by InstaForex Company – www.instaforex.com
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