XAU/USD 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The bullion stopped appreciating in the second half of January, and since then the metal has formed a well-defined bearish channel. The outlook is therefore gold-negative, with the 2014 low at 1,132 potentially becoming the next victim after 1,200. However, in the short run there is a high probability of a rally as a part of an upward correction, being that XAU/USD has just touched upon the support trend-line at 1,155.50. The immediate resistance is at 1,174.12, but the price may well extend the gains up to 1,195.00 before the bears regain control of it. This scenario matches the signals provided by the technical indicators, as the asset is a buy on the weekly time-frame.
© Dukascopy Bank SA
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