FX.co ★ Technical analysis of Gold for April 28, 2016

The dollar's weakness is helping gold prices move higher and challenge the recent highs and medium-term resistance. Bulls could manage at the end of this week to make a real breakout and push towards $1,300 but I continue to believe that this upside will be limited and bulls should be very cautious.

Black lines - triangle pattern

Gold is trying to break above the triangle pattern and above the 4-hour Ichimoku cloud. Short-term support is at $1,235 while resistance is at $1,260-70. With the dollar weakening, there are a lot of chances we could see $1,300 even this week. However, bulls need to be very cautious and keep their stops tight.

The weekly candle is above the tenkan-sen (the red line indicator) and if this week closes above it, it will be a bullish sign. I continue to believe that gold should not be bought at the current levels and bulls need to be patient for a pullback towards the 38% retracement at least. The stochastic oscillator is still at overbought levels but we could see a new high in the price with a divergence in the stochastic before a larger pullback.