Technical Analysis of Gold for April 27, 2016
Gold is still trading inside the triangle pattern and it seems that it is going to test the upper boundary once again very soon. I continue to remain neutral or slightly bearish as long as we are below the resistance of $1,260-70. A break above that area will open the way for new highs towards $1,320.
Black lines - triangle pattern
Gold, I believe, has limited upside potential. The rewards for being bullish, in my opinion, are not worth the risk at the current levels. The entire move since the March low at $1,208 is surely not impulsive. This diminishes the chances of a new high. I believe the Gold bulls should remain patient and wait for a deeper correction towards $1,190-60 to unfold before opening long positions.
On the weekly chart, prices are trying to re-test the broken tenkan-sen (red line indicator) to the upside. A rejection here will push prices towards the $1,190 support where the 38% Fibonacci retracement is found. Over the last few weeks, Gold has mainly moved sideways but still has not reached my downside targets. I prefer to stay mostly neutral or slightly bearish.
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