Gold price remains in a bearish trend but yesterday we observed the bullish divergence in the RSI together with a candlestick reversal pattern. Price has the potential to rise to $1,260 today.
Black lines – bullish divergence
Gold price has broken out of the bearish channel and is now back testing it. The RSI is warning bears that the downside momentum has weakened. The 4-hour candle pattern of a bullish hammer is usually a trustworthy reversal pattern. Resistance is at $1,247. Breaking above it will confirm the reversal pattern and push price towards cloud resistance at $1,255-60.
On a daily basis Gold price has also made a bullish hammer. With FOMC tonight we expect Gold price to be volatile. If price is near $1,260 before the FOMC, I would prefer to be neutral as we might see another leg down towards $1,220-$1,200.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Performed by Alexandros Yfantis,
InstaForex Group © 2007-2017
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