By Yan Petters – For the past couple of months gold proved to be one of the most exciting trading instruments in the market. The commodity, which is considered to be quite volatile as is, has turned into a leading investment, especially due to the lack of certainty in the market, and the unstable condition of the leading economies. Gold has recently advanced to $1,365 an ounce, gaining over $40 per ounce in merely 3 days. However, several technical indicators suggest now that a bearish correction might be impending.
• The chart below is the Gold 4-hour chart by ForexYard.
• The chart shows that after a 3-days rally, gold has been range-trading around $1,360 an ounce.
• The bullish rally continued for as long as gold remained above the Bollinger Bands‘ higher boarder. Yet now, gold has dropped below the higher band, indicating that the bullish move has reached its peak.
• A bearish cross of the Slow Stochastic also suggests that gold might see a bearish correction soon.
• The RSI is pointing down at the moment. If the RSI will drop below the 70-line, it might verify that a bearish move is inevitable.
• Gold’s next support levels are located at: $1,356, $1,347, $1,341 and $1,335.
• Resistant levels are: $1,365, $1,370, $1,381 and $1,386.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
