(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
1/06/2010 - GOLD - Despite the deep bearish correction that occurred in spot gold (a daily chart of which is shown) in the month of December, price action has begun what could turn out to be a significant rebound as of the beginning of 2010. This occurs within the context of an overall, continuing uptrend. The December bearish correction brought price down to a key 61.8% Fibonacci retracement level at around 1074 (the low-to-high retracement span being measured from the low on 10/2/2009 to the all-time high on 12/3/2009), before bouncing up off this support region. In the process of this bullish bounce, price also broke out above a steep downtrend resistance line that represents the drop from the all-time high. Currently, price action has approached short-term resistance around the 1141 price region. Further bullishness on the rebound that breaks out significantly above the 1141 resistance region could target a re-test of the all-time high resistance around 1225. To the downside, within the context of a continuing uptrend in gold, key support remains in the 1070-75 price region.
James Chen, CMT
Chief Technical Strategist
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