Gold price confirmed its upward reversal on Friday by breaking above $1,295, and it is confirming that the short-term trend is up as a higher low and higher high has been formed. The decline from $1,391 has most probably been completed and I am now looking for a bounce towards $1,315 first and then towards $1,350. This upward bounce scenario will be valid as long as price holds above $1,275.
Short-term support is found at $1,293 and then at $1,285. It is important for the short-term upward trend to hold above the horizontal green trend line and the upward sloping red trend line. The short-term trend is up and is trading inside the Ichimoku cloud. Trading within the cloud confirms that the down trend that started at $1,391 is now over.
The daily chart has found support inside the upward sloping Ichimoku cloud as we expected and as I updated my last week's chart, the move I expected initially to at least the 38% retracement where the 1st important resistance is found. Next I would anticipate a small rejection at the 38% retracement and another leg up towards the 50% retracement. Concluding, we remain bullish as long as price trades above $1,275. The target if $1,275 holds is the $1,340-50 area.
