Red lines- bearish medium-term channel
blue lines- Fibonacci retracements
Gold price is trading just above $1,700 today. Yesterday price broke above the short-term resistance at $1,670 and above the short-term downward sloping channel. We warned bears that if price were to break out of the bearish channel, we should then expect price to reach $1,700. Price has now retraced 50% of the decline from $1,807. Price remains inside the medium-term bearish channel. Price is now challenging the upper channel boundary resistance. The RSI has reached overbought levels. There is increased certainty that we will at least see a short-term pull back. So opening long around $1,710-$1,700 we believe is risky. We should not ignore the medium-term bearish channel. A rejection would be a bearish signal.Channel resistance is at $1,715 and if broken Gold price will at least test $1,732 where we find the 61.8% retracement level.
