Gold breaks ascending pattern

Source: Dukascopy Bank SA


Despite initially holding, the lower trend line of the post May 16 channel up pattern failed to provide enough support on Thursday morning. By the middle of the day's European trading hours, the price for gold had not only passed below the trend line, but also confirmed it as resistance. The trend line was acting as resistance together with the 1,850.00 mark.

If the metal declines, it is expected to look for support in the 200-hour simple moving average and the previous high and low level zone at 1,832.00/1,836.00. Further below, note the last week's support zone near 1,810.00.

However, a potential recovery of the commodity price would have to reach above the 1,850.00 mark and the 50 and 100-hour simple moving averages near 1,855.00, before approaching this week's resistance levels at 1,865.00 and 1,870.00.
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