Comex Gold Futures (GC) Technical Analysis – May 26, 2016 Forecast

August Comex Gold futures are called higher. Oversold conditions and the weaker dollar are contributing to the strength. If the U.S. Dollar retraces 50% of its recent rally as expected then gold could make a similar move to the upside.

The main trend is down according to the daily swing chart. The market is in no position to turn the main trend to up, but it is ripe for a sizeable retracement.

The short-term range is $1292.40 to $1220.60. Its 50% level at $1256.00 is the next upside target. It is followed closely by another 50% level at $1259.90.

Based on the early price action and the current price at $1230.90, the direction of the market today is likely to be determined by trader reaction to the downtrending angle at $1236.00.

The angle at $1236.00 is currently acting like resistance, however, crossing to the strong side of this angle could trigger an acceleration to the upside. The main targets over this angle today are the 50% level at $1256.00 and the downtrending angle at $1260.40.

A sustained move under $1236.00 will indicate that sellers are still present. This could lead to a re-test of yesterday’s low at $1220.60.

Taking out $1220.60 will signal a resumption of the downtrend with a potential target at $1211.80. Look out below if $1211.80 fails as support.

Watch the price action and read the order flow at $1236.00 today. Trader reaction to this angle will tell us if the bears are still in control or if the bulls are taking over.