Gold price as expected has bounced off the $1,210-20 support area and is breaking out of the bearish channel. Price could make a pullback early this week and provide a double bottom but overall I'm pretty confident the bounce towards $1,250-60 has started.
Blue lines - bearish channel
Gold price is trading below the 4-hour Kumo (cloud) and this is bearish. We could see a rejection at the cloud and a pullback today for a double bottom at $1,217. A break above $1,242 will open the way for a move towards the important resistance of $1,250-60.
Green rectangles- oversold signs
In the daily chart we posted in our past posts, I showed the reversal signals I was seeing and also pointed out the minimum target area for the bounce that has already started. A break above the daily cloud will be a bullish long-term sign and will put an end to the bearish scenario which is waiting for a deeper pullback towards $1,160.
The material has been provided by InstaForex Company - www.instaforex.com