Gold price remains in a short-term bullish trend. However, the minimum conditions for a healthy bounce have been met and the downtrend can now resume. The bounce could extend even higher towards $1,140-50 area if resistance at $1,130 is broken. On the other hand, support at $1,090 is critical, because if price falls below this level we will see the resumption of the down trend towards $1,040-$1,000.
Blue lines - triangle target projection
Gold price has managed to reach the 38% Fibonacci retracement which is the first important resistance in this upward bounce. Gold price has also met the triangle breakout target at $1,127. Price is above the Ichimoku cloud implying short-term trend remains bullish. Short-term support is found at $1,111. If broken, we should expect the cloud support to be tested.
Black line - wedge formation
The weekly chart in Gold remains in a longer-term bearish trend. Price is below the Ichimoku cloud and below the tenkan- and kijun-sen indicators confirming bearish trend. The wedge formation from March 2013 has produced a false breakdown as price moved back inside the wedge formation. Bears should be very cautious as price could continue its upward bounce towards the 61.8% Fibonacci retracement at the yellow shaded area.
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