Technical outlook and chart setups:
Gold dropped to $1,160.00 levels taking out long positions yet again. A weekly chat view has been presented here for a larger trend view. A support trend line connecting the 2004/05 and 2008/09 lows is passing through the $1,150.00/$1,160.00 levels. The fibonacci 0.618 support of the rally between $680.00 and $1,900.00 is also passing through the $1,154.00 levels as depicted here. Furthermore, a past resistance turned support is also converging at the same levels. With all the above views, probabilities are high that the metal should bottom out between $1,150.00 and $1,160.00 levels. A bullish reversal signal should be watched for on the daily chart before confirming the same.
Trading recommendations:
Remain flat for now. Signal confirmation is required between $1,150.00 and $1,160.00 levels.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com
