Gold has been trading downwards. As we expected, the price tested the level of $1.283.20. The gold is approaching the key short-term support at the price of $1.281.00, selling at this stage looks risky.
According to the H1 time-frame, we found that sellers are in control but that key support at the price of $1.281.20 is very close to current price, which is sign that selling looks risky. We found bullish divergence on the LBR oscillator in creation, which is sign that potential rally might happen. Supply line is holding for now but the upward breakout may confirm further rally. Resistance levels are seen at the price of $1.289.20 and $1.295.00. Key support is seen at the price of $1.281.20.
Trading recommendation: We closed our short position from $1.290.80 and we made 0.6% profit. We are neutral on the Gold now but we will observe key support at $1.281.20 to see how the price will reacti around that level.
The material has been provided by InstaForex Company – www.instaforex.com