Technical analysis of Gold for May 2, 2016

Gold has broken above the important short-term resistance levels of $1,260-70 and has given new highs. A top around $1,300-$1,320 is still very probable as gold's bullish momentum is not as strong and oscillators enter overbought levels. I continue to believe upside potential is limited and I prefer to wait for a bigger pullback towards $1,150 to open long positions.

Black lines - support levels

Yellow area - overbought stochastic diverging

Gold remains above the Ichimoku cloud on the 4-hour chart. The trend remains bullish. Short-term support is found at $1,281 and at $1,263. The stochastic and RSI oscillators are providing a warning for bulls as they are at overbought levels. No reversal signal yet.

The weekly chart remains bullish as the price has broken above resistance. The trend is bullish as the weekly Kumo is below the price. Support is found now at $1,250 by the tenkan-sen and at $1,170 by the kijun-sen. The stochastic is diverging and this is another warning for bulls. No reversal sign on the weekly chart yet. $1,320 could be seen before any meaningful pullback.The material has been provided by InstaForex Company - www.instaforex.com