Gold Bounces Back from Tuesday Lows

Gold found support in our 1st tier uptrend line yesterday and has bounced back from Tuesday lows, avoiding a retest of $1100/oz in the process.  Gold is now back in the middle of its present trading range as gains in the Aussie and Loonie are counterbalanced by overall weakness in the Cable and Euro.  That being said, it will be interesting to see how the Cable and EUR/USD react to tomorrow’s key data sets from China, Australia and the U.S.  Should the Cable and EUR/USD manage a solid risk rally and the Aussie continue its upward trajectory, then gold may receive the boost it needs to challenge our downtrend lines.  On the other hand, should the Aussie and Loonie falter and the Cable continue its slide, then gold may follow suit due to correlative influences.  Regardless, activity could pick up over the next 24-48 hours considering the wealth of data we’ll be receiving from the Pacific and U.S.

Technically speaking, gold faces multiple downtrend lines along with 3/5 and 3/3 highs.  Furthermore, the psychological $1150/oz level could serve as a technical barrier should it be reached.   As for the downside, gold still has multiple uptrend lines serving as technical cushions, highlighted by our 1st tier which runs through 2/23 lows.  Furthermore, gold has the psychological $1100/oz level working in its favor should it be tested.
Present Price: $1122.50/oz

Resistances: $1123.85/oz, $1125.97/oz, $1128.16/oz, $1130.35/ oz, $1132.66/oz, $1135.91/oz

Supports: $1120.61/oz, $1118.06/oz, $1116.20/oz, $1114.26/oz, $1111.60/oz, $1108.32/oz

Psychological: $1100/oz, $1150/oz, January Highs, March highs and Lows

(click chart to enlarge)

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