Gold prices are making an upward bounce that is not impulsive. Prices are making an overlapping formation with positive slope and have reached the 38% Fibonacci retracement of the decline from $1,256 to $1,233.
Prices are moving upwards in a corrective pattern within the purple trend channel as shown above in the one hour chart. Once this channel breaks downwards, we should expect the next leg down towards $1,200 to start. As said in our previous analysis, it is important for entire wave structure for prices to break below $1,220 in order to confirm that the rise from $1,180 is a three wave move. The short- term support is found at $1,237 and short-term resistance is at $1,248.
Our view remains bearish for all time frames. Even if prices make another upside move towards $1,270, our bearish scenario and longer term view will not have changed. We still believe that prices will eventually make new lows towards $1,140. The daily chart continues to support our bearish view as prices seem that they are making only a small upward corrective move inside a bigger downward trend.
