Red lines- bearish channel
Green line- neckline support (horizontal support)
Gold price is trading above $1,655 when yesterday bulls were on the defensive trying to hold price above the key support area of $1,615-20. In our previous post we noted a bearish pattern of an inverted cup with handle. The support neckline has held and price respected it. Price is bouncing off this key support confirming once again its importance. Price remains inside the medium-term bearish channel. Bears need to break below the green support trend line in order to produce a new bearish signal. On the contrary bulls stepped in right on time and they are pushing price higher towards resistance of $1,660-70. Breaking above $1,660 could lead to a bigger bounce higher towards the upper channel boundary at $1,685-90.