Chart of the Day - 3/11/2010 – GOLD

3/11/2010 – GOLD – Recent bearish price action on spot gold, a daily chart of which is shown, has prompted a correction back down to the long-term uptrend support line. This bearish correction occurs right after price reached a high of around 1145 just last week. As of Thursday (3/11/2010) morning New York session, price is hovering right around the key trendline. In the event of continued bearish momentum that breaks down below this trendline (currently around the 1100 price region), price could target further downside support around the 1070 price region, potentially placing the current long-term uptrend at considerable risk. In the event of any substantial upside bounce off the trendline, a major upside price target within the context of a potentially continuing uptrend resides around the noted 1145 high, and then the 1160 price region.
 

James Chen, CMT
Chief Technical Strategist
FX Solutions
 

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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)