Chart of the Day - 3/16/2010 – GOLD

3/16/2010 – GOLD – Price action on spot gold, a daily chart of which is shown, has made a swift and pronounced bounce off a long-term uptrend support line. This long-term trendline was falsely breached in early February, but has subsequently been respected since then. Most recently, price action descended back down to the trendline last week before making the pronounced bounce this week. On Tuesday (3/16/2010) in particular, price action on gold has made a strong bullish move, closely approaching resistance in the 1130 price region. Continued bullish momentum off this bounce could target further key upside resistance in the 1160 price region. To the downside, the noted uptrend support line should provide dynamic support for the time being, with any subsequent breakdown of this trendline potentially targeting the 1070 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.)