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FX.co ★ Gold challenges major Fibonacci resistance

Gold challenges major Fibonacci resistance

Gold price has managed to break above $1,580 and bulls are now trying to recapture $1,600. We are now at a major Fibonacci retracement level and the chances of a reversal and rejection here are high. Bulls need to be very cautious.

Gold challenges major Fibonacci resistance

Green rectangle - support area

Gold price as expected has bounced off the green support area as we expected in previous posts. Gold has now reached the major 61.8% Fibonacci retracement level resistance. This is major short-term resistance level that traders should not ignore. A rejection here could bring Gold price sharply back towards $1,550 if not lower. Short-term support is at $1,560-50. If broken we should consider the scenario where this bounce was only a counter trend rally as the main scenario. Gold price could then move even below $1,450. However it is still too early to say anything as in the Daily chart the oscillators have just started turning upwards. A rejection would be a bad sign. That is why we keep a close eye on the Fibonacci level and the short-term $1,560 support.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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