Technical analysis of Gold for April 4, 2016

Gold price remains inside the bearish channel and it is heading towards the 38% Fibonacci retracement of the rise from $1,045. So $1,190-$1,200 is our short-term target area. Gold has entered a corrective phase that is expected to end around $1,150-$1,100 and it will have the form of a three-wave decline.

Blue lines - bearish channel

Gold price is below the 4 hour cloud and is making lower lows and lower highs. The trend remains bearish. Support is at the $1,190-$1,200 area where we find the 38% Fibonacci retracement. This is the first target area of this downward move. Resistance is at $1,240-50.

The overbought weekly stochastic has been warning bulls for several weeks now to be cautious and protect long positions. The weak dollar as well has not produced a bounce for Gold and this is another worrying sign for Gold bulls. I'm very confident that the entire rise from $1,045 is over, however, even if we see new highs near $1,300, the optimum level to open longs in Gold will be around $1,100-$1,150.The material has been provided by InstaForex Company - www.instaforex.com