Gold’s brake pads seem to have no effect on the triumphing bullish structure, which has hiked to an almost 8 year high of 1,788. The commodity’s overwhelming climb is tackling the 1,788 mark, that being the 123.6% Fibonacci extension of the down leg from 1,765 to 1,670. The pickup in positive momentum is also reflected in the strengthening Ichimoku lines.
Glancing at the short-term oscillators, they too aid an improving picture suggesting upcoming advances. The MACD is in the positive region and has jumped above its red signal line, while the RSI rises above the 70 level. Further positive backing stems from the maintained bullish slopes in the simple moving averages (SMAs) and the price distancing itself above the Ichimoku cloud.
A clear violation of the 123.6% Fibo extension of 1,788 could shoot the price towards the 1,796 obstacle from October 2012, followed by the 1,803 barrier from November 2011. Steeper ascents may test the 150.0% Fibo extension of 1,812 and the nearby 1,816 high achieved in September of 2011. In the event the bulls are still controlling the market, the 161.8% Fibo extension of 1,824 could come into play.
If sellers manage to take control and steer the price back down, initial friction could come from the red Tenkan-sen line at 1,775, ahead of the 1,765 low. A step underneath could encounter the 50-period SMA at 1,763, currently in line with the cloud’s upper surface. Sinking deeper into the cloud, the key support region from 1,743 – 1,747 – which includes the 100-period SMA – could challenge the decline ahead of the 200-period SMA at 1,735.
In brief, the positive picture overpowers and only a break below 1,743 could attempt to disable the latest climb from the 1,670 low.
