Gold has broken its short-term upward sloping trend line from 1,260, and although it reached the downward sloping trend line resistance at 1,293, it could not break above it. Rejection at the resistance levels was not good for long positions. Moreover, prices have taken a downward turn as the pressure from the resistance trend line is helping short positions. Prices have turned downwards and are now challenging the short-term support at 1,268-70.
Short-term resistance is found at 1,293. Today's pivot point is 1,278. If prices manage to move above the pivot point for at least one hour, then we could see another test of the 1,293 resistance. Until then, we have changed our view to bearish as the upward move does not look impulsive. This means we could soon see a new low towards 1,250 where the very important support neckline is.
The daily chart confirms that the bounce we expected was not strong enough to challenge the downward trend and it seems that it is more possible for the longer-term support at 1,250-60 to break downwards. Unless prices break above the 1,293 resistance, then we should expect new lows for Gold. Stop for short positions is at 1,293. Target is at 1,250-60. If that level is broken, then expect 1,140.
