FX.co ★ Technical analysis of Gold for May 26, 2016

Gold price bounced towards $1,230 as we expected from our latest analysis where I said that I preferred to take profits as a bounce was imminent. The bounce could extend even towards $1,240-50 where I believe will be the next top before the final leg down towards $1,190-70.

Black line - long-term resistance

Blue lines - bearish channel

Gold price is testing the upper channel boundary. If bulls manage to break above it then we could see a multi-day bounce that could push price back towards the Ichimoku cloud near $1,250. However a new lower low cannot be ruled out but it has a low worth as the risk is high to short at current levels.

The weekly chart remains bearish and suggests that any bounce that remains below $1,290 should be sold as price is expected to move lower towards the upper Kumo (cloud) boundary. So a move towards $1,180 is to be expected.