Gold rallies after short-term head and shoulders
Gold managed to break higher from a short-term head and shoulders pattern, with the price rallying into the upper Bollinger band. The breakout above $1252 points towards a move out of the immediate downtrend, with further upside likely.
However, given the extension away from the 20 day simple moving average (SMA) – the middle Bollinger band - there is a good chance we could see a retracement lower today. Such a move is likely to be temporary in nature, with further upside likely before long. We would need a break below $1240 to negate the bullish outlook.