Gold Breaks Through Resistance, Testing Previous Highs
Alexandros Yfantis | Aug 03, 2016 04:32AM ET
Gold price has broken through resistance and is testing previous highs at $1,375, with increased chances of a new higher high towards $1,400. However, gold bulls should be very cautious as we observe bearish divergence signs.
Red line - support
Gold price is making higher highs and higher lows. The reversal I was expecting is not coming as price still holds above the trend reversal level of $1,345. Short-term support is now at $1,355. Resistance is at our previous high at $1,375. A trend remains bullish.
Blue lines - bullish channel
Gold price is showing divergence signs in both oscillators shown on the daily chart above. This is an early warning for bulls. They need to raise their stops and be prepared for a pullback. This might happen from higher levels like $1,400 as the trend remains bullish both in the short- and medium-term.
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