Gold Bounces Higher But Doesn't Break Key Resistance
Alexandros Yfantis | Jul 22, 2016 06:04AM ET
Gold bounced yesterday higher towards $1,340, but the important resistance and trend change level of $1,350 was not broken upwards. The price is now turning back down, and a test of the recent low will be decisive of whether we would see another test of $1,375 or a break below $1,300.
Gold is trading below the Kumo on the 4-hour chart. The price bounced towards it yesterday and got rejected. Short-term resistance is at the $1,340-50 area, and only a break above it will open the way for a new high towards $1,400.
But the rejection so far favors bears and a move to new lows towards at least the 38% Fibonacci retracement. The 61.8% Fibonacci retracement is at $1,270.
On the daily chart, the price is trapped between the declining tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator) support. A break of either will be decisive for the trend over the next few days. I believe that the price will eventually break lower towards the daily Kumo (cloud) near $1,270-80.
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