Gold wave analysis for February 18, 2016

Gold price did not move higher in an impulsive mode, but it is moving sideways in what looks to be a triangle pattern. This increases the chances of a deeper correction towards $1,150. We might see $1,230-40 first but there are many chances to see $1,150 before a bullish trend resumption.

The four-hour chart above shows the price testing the cloud support. The triangle pattern has the upper boundary at $1,210 and the lower boundary at $1,202. A breakout above it will open the way to $1,230. A breakout below it will open the way to $1,150.

On a weekly basis, the price is still above the broken downward sloping wedge and the weekly cloud. The price is back testing the breakout area. Reaching a higher low on a weekly basis will be the first step of a longer-term reversal pattern in gold prices.

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