Technical analysis of Gold for June 22, 2016

Gold continued to move lower towards $1,260 yesterday after breaking below the support of $1,270-75. The trend is bearish as we have a medium-term reversal signal from last week implying that more downside should be expected. However, I prefer to stay in cash and not short the precious metal.

Gold is testing the 4-hour cloud support and the 50% retracement after breaking down below the 38% Fibonacci support. The short-term trend is bearish with an important short-term top at $1,317 and an important reversal. A break below $1,225 will open the way for a test of the $1,200 lows.

With a triple bearish divergence in the weekly stochastic, I remain neutral in Gold as I expect the price to continue the pullback towards at least the weekly tenkan-sen (red line indicator) at $1,255. However, depending on the UK referendum, we could even see a push lower towards $1.180-60. My longer-term view remains bullish targeting above $1,400-$1,500.

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