XAU/USD 4H Chart: Channel Up

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Despite the failure of gold to surpass 1,284 in March, the price managed to stabilise near 1,208 dollars and is now recovering within a bullish channel. After the metal consolidates above a cluster of supports, we expect it to resume the rally and eventually reach the upper bound of the pattern, and there is enough room for new bulls to enter the market and push the price higher, being that right now 60% of open positions are short. The upside risks are also increased by the technical indicators, a majority of which are currently pointing north. In case demand at 1,242/1,240 turns out to be insufficient to trigger strong buying, the sell-off will likely extend down to the support trend-line at 1,231.
© Dukascopy Bank SA
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