Gold wave analysis for February 17, 2016

Gold is trading above $1,200 supported by the 38% Fibonacci retracement. Can the entire downward move have ended? What must happen to gold to make it rise towards $1,300? My preferred scenario is that gold price has ended a wave 4 at the 38% retracement and has reversed as we expected yesterday. Now it is important for gold to continue its impulsive upward move.

Blue line - support trend line

Gold price started an impulsive move up from $1,190. The decline was corrective. That increased chances that we could see a move above yesterday's highs. Important support is the blue trend line that connects the two recent lows.

An alternative scenario is marked by blue letters. Important resistance is seen at $1,130-40, so rejection in that area could imply the rise was wave B and wave C should move towards $1,150 near the 61.8% Fibonacci retracement. Another clue that we are heading lower will be the breakout below $1,190. So, we remain bullish as long as we are above $1,190-95.The material has been provided by InstaForex Company - www.instaforex.com