Technical analysis of gold for January 31, 2017

Gold price bounced towards $1,204 yesterday. This Gold bounce was expected since price reached the $1,180 level where the 38% Fibonacci retracement was found. Gold price is expected to make a lower high around current levels and reverse downwards towards $1,160.

Gold price is trading below the Ichimoku cloud in the 4 hour chart. Price has bounced off the 38% Fibonacci retracement. This bounce should soon be faded and reverse lower. The 61.8% Fibonacci retracement is my target for the correction to end. I'm not ruling out a deeper correction but this is the most probable target.

In previous posts I said that the correction in Gold would take a couple of weeks. We are still in the corrective phase. Price remains below weekly cloud resistance. A test of the tenkan-sen (red line indicator) is expected before the resumption of the up trend.The material has been provided by InstaForex Company - www.instaforex.com