Gold technical analysis for February 4, 2016

Gold price continued moving towards new highs yesterday remaining inside the bullish channels and without any reversal signal shown yet. However, the price is now testing channel boundaries that are important resistance levels and now we are going to find out if this entire rally from $1,050 is a correction or a new uptrend beginning.

Blue lines - medium-term bullish channel

Gold price reached the upper channel boundary resistance and broke out above the 61.8% Fibonacci retracement. A trend remains bullish but bulls need to be cautious now and raise their stops because this can be the end of the entire rise from $1,050.

Gold price is approaching weekly resistance of $1,150 and this can signal the end of a bounce and the downtrend resumption. We must not forget that we are still inside the downward sloping wedge and below the Ichimoku cloud. So, only in case of a break above these two resistance barriers, we can have confirmation of the reversal in the long-term trend. The short-term trend remains bullish with important support at $1,125.The material has been provided by InstaForex Company - www.instaforex.com