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Gold retracement

Gold bounced neatly off the 61.8% Fibonacci retracement level on Friday. This might be interesting given that the slow stochastic is well below 20% and over sold.

Fibonacci traders will now be looking to assess whether this begins to look like developing into a significant turning point.

If gold does make a clear break of this resistance and reject the 61.8% Fibonacci retracement, the chances are it could also signal a downward correction to $US.

Gold 4 Hour Chart

Resistance on the shorter term, 4 hour chart might be useful. A close, decently clear of the $1193 resistance could indicate more upside.

As I write gold is starting to break this level. However, it may pay to be cautious and wait for more confirmation if the current closes only a little above this resistance. Large candles with most of the body below the resistance have a habit of  producing false breaks.



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