IronForex: Gold traded lower on Friday, but hit support near the longer-term uptrend line taken from back at the low of the 17th of December, slightly above the 1305 (S1) support level. Then the metal rebounded.
The price structure on the 4-hour chart still suggests a short-term downtrend, but given that the pair rebounded from the aforementioned longer-term trend line, I prefer to take the sidelines for now. I prefer to see a decisive close below 1305 (S1) before I get confident on larger bearish extensions.
What’s more, looking at our short-term oscillators, I see signs that the current rebound may continue. The RSI rebounded from its 30 line and now looks to be headed towards its 50 line, while the MACD, although negative, has bottomed and just crossed above its trigger line.
These signs enhance my choice to adopt a “wait and see” stance for now. As for the broader trend, the fact that the metal stayed above the aforementioned uptrend line keeps the longer-term picture positive.
However, as I already mentioned, a clear close below that line may prove a game changer.
• Support: 1305 (S1), 1300 (S2), 1290 (S3)
• Resistance: 1318 (R1), 1325 (R2), 1330 (R3)