Technical analysis of gold for February 2, 2017

As expected, gold price pulled back towards $1,200 and now is bouncing strongly upwards towards the previous highs of $1,220. The metal is trading inside a narrow range. The downward correction might already be over. We keep our longer-term bullish view.

Blue line - resistance

Red line - support

Gold price is trading above the 4 hour Ichimoku cloud. We could see a back test of the cloud support at $1,202 but overall there are a lot of chances that the entire correction is over at $1,180 and we have started the next leg up. The NFP numbers announced on Friday will certainly influence the short-term trend.

Weekly candle in gold price is testing the lower cloud boundary again. I expect the correction to take more time to unfold lower towards $1,160 but it seems that this scenario is getting weaker. A break above $1,220-25 and a weekly close above it will confirm that $1,180 is the low and we are heading towards $1,3000-$1,285.The material has been provided by InstaForex Company - www.instaforex.com