Gold Technical Update
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Gold has been in a corrective rally, finding itself in a consolidation channel that is slightly tilted upwards. However, today's trading found resistance at 1640, the high on Dec. 21. A slide back to 1590-1600 area is possible. However, there is still upside risk unless the market pushes below 1600, and pushes the RSI below 40 in the 4H chart. To the upside a break above 1640, then 1650 where the 200 4H SMA resides, opens up a declining trendline just under 1700, close to 1690.
The daily chart shows that if the market does indeed get to 1690-1700 area, it will be testing an important declining trendline, and we can expect some resistance there to push back toward the 1640-1650 area.
So as the market declines from the 1640, we have support factors at the 1590-1600 area. Then, if this area holds and there is a retest of 1640, there is a higher chance it will break, and resistance should then be anticipated at about the 1690-1700 area.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.