Technical analysis of Gold for June 6, 2016

As we expected gold price started a new trend after the Non-Farm payrolls announcement last Friday. In our previous analysis we noted that the downside potential was limited and a bounce towards the $1,250-60 area at least was expected. Gold price spiked upwards and gave a short-term buy signal.

Blue lines - bearish channel (broken)

Black line - long-term resistance trend line

Gold price broke above the Kumo (cloud) resistance and the bearish channel on the 4-hour chart. However, the price remains below the long-term resistance trend line at $1,255. Following the bad NFP numbers announced last week, gold strengthened as the dollar weakened. Support is at $1,228. Resistance was formed at $1,255-60.

As mentioned in the previous post, gold price was holding just above the 38% Fibonacci retracement. The price bounced strongly as expected and reached the tenkan-sen (red line indicator resistance). A weekly close above it will be a bullish signal. Overall gold price is bullish for the long-term as long as price is above $1,045. If we make a new high above $1,295 the critical support level will rise to $1,200. The material has been provided by InstaForex Company - www.instaforex.com