Gold Reaches For Even Loftier Levels
Gold (daily chart) as of Tuesday (8/02/2011) has once again established yet a new all-time high, which has been occurring regularly for the past three weeks, this time around the 1640 price region. This occurs within the context of a very clear and strong bullish trend on multiple timeframes — long-term, medium-term, as well as short-term. The 1635 price region, which price has just slightly surpassed, represents the 161.8% Fibonacci extension target of the last major bearish correction (from the early-May previous all-time high at around 1575 to the early-July correction low around 1478). Now that price action has reached its upside target and established yet a new all-time high, another correction could be impending before a potential resumption of the strong overall bullish trend. Downside support within the context of the current uptrend resides around the previous 1575 all-time high price region. In the event of a resumption of the current trend, a breakout above the new 1640 high could go on to begin targeting further uncharted upside around the 1730 price region, which represents the 261.8% Fibonacci extension of the noted last major bearish correction.
(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)
James Chen, CTA, CMT
Director of Technical Research and Education
FXDD
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