11.10.201608:52 Forex Analysis & Reviews: Technical analysis of Gold for October 11, 2016

Long-term review

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Gold price continues to trade inside the downward sloping channel despite the bounce from $1,241 to $1,266. The current price formation implies that this is just a pause in the downward trend and a new low towards $1,215 should follow. However, this will change only if we see a break above $1,266.

Dark blue lines - bearish channel

Price is below the Ichimoku cloud and inside the bearish channel. Price drop has stopped just above the 78.6% Fibonacci retracement of the rise from $1,200 to $1,375. Short-term support is at $1,255 while resistance is at $1,266.

On a weekly basis price has stopped the decline at the 38% Fibonacci retracement of the entire rise from $1,045. A bounce should come from these levels but if we break to new lows, price will be in danger of reaching $1,214 and the weekly Ichimoku cloud support and also 50% Fibonacci retracement. My longer-term view remains bullish. This downward move could bring price even towards $1,170 but this will be a gift for bulls.

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