Gold prices left the internal upside channel which organize the upside short-term wave within the major upside channel which holds the mid trend for price. We see that the breach of internal channel is only temporarily till it makes a downside correction for the last upside wave, helped by the creation of a bearish technical pattern with neckline at 1225.00, where all its targets has been achieved. 
After approaching from 38.2% Fibonacci level which coincides with MA 100 daily, gold heads to the upside to form a bullish technical pattern with neckline at 1212.50 which represents 23.6% Fibonacci level previously breached which now became resistance. We believe that the bullish technical pattern will be able to push gold prices higher to return it back to the upside trend, where the upside trend is supported by the bullish signals from the Stochastic Oscillator which makes us expect a breakout to the aforesaid neckline heading to 1225.00 where we expect some volatility due to the strength of that level and the retest of the neckline that is predicted to be breached at 1212.50 before continuing the short term upside trend which is estimated to target 1250.00, as this level represents a return gate to the previously breached channel. All in all, we expect the continuation of the short-term trend but we have to take into consideration the breakout of 1212.50 while 1177.00 remain intact.
By: Yasir Mubarak
Senior Technical Analyst
[email protected]
www.ecpulse.com