Technical analysis of gold for January 23, 2017

Gold price bounced strongly towards its recent highs but what I see is a backtest of the broken channel. Price however remains in a bullish short-term trend as long as we are trading above $1,195.

Red lines -bullish channel

Gold price continues to trade above the 4-hour Ichimoku cloud. Support is at $1,200 and at $1,195. If this support is broken, we should expect a pullback towards $1,180 at least if not at $1,160. Resistance is at $1,218. If broken, we could see a continuation of the up trend towards $1,230-40.

On a weekly basisGold price is still struggling at the lower cloud boundary at $1,220. This is a very important resistance level. A rejection from this area will push Gold towards $1,160. This is my preferred scenario before the next upward move towards $1,300-$1,400.The material has been provided by InstaForex Company - www.instaforex.com