FX.co ★ Gold technical analysis for October 16, 2015

Gold price has reached my target area at $1,195 plus or minus 10$. Gold price has reversed and is most probably going to test the short-term support at $1,170. This is not the time to buy gold. The upside is limited, while the downside is open to $1,120.

Red lines - bullish channel

Gold price is trading above the Ichimoku cloud and inside the bullish red channel. Gold price is making a pullback towards the kijun-sen (yellow indicator) I believe support at $1,170 will hold before a final upward thrust to $1,200. The upside is limited, so traders should be very cautious about long positions.

Red line - resistance broken

Gold price has moved towards the weekly Ichimoku cloud, which is found at $1,200. We reached $1,190 and reversed. A trend remains bullish and we can reach $1,200. However, we are at overbought levels. Downward reversal should be expected soon.