If gold can break through this resistance area, a move towards 1475, the 61.8% retracement level, becomes the most likely scenario.
The rally from last week's lows appears to be corrective in nature and we do not expect the price to move much higher than 1475 before selling pressure resumes. We suspect the market has strongly moved to a "sell the rallies" mentality since the precipitous drop through key support at 1525.
Gold was bouyed by strength in oil and the industrial metals yesterday, though we are still bearish on commodities in general and gold whilst it remains below 1525.
The dollar looks poised to make an attempt at key resistance at 84, which if broken paves the way for a strong rally up to the 88 area.
The weekly jobless claims will be closely watched as usual and could move the market, with little other economic news on the data release slate today.
Today's video for subscribers looks at yesterday's trading action and our strategy for our next trade.