Gold has been bearish since hitting a high on the year around 1307 in February. It continued to decline towards the 1130 low on the year until stalling around 1150 this week. Then it shook a little ahead of the FOMC statement (3/18), and then rallied sharply as the market sold the USD across the board after the event risk. Gold (XAU/USD) 4H Chart 3/19(click to enlarge) Gold price rallied sharply back above last week’s highs. The 4H chart shows a loss of the bearish momentum as the 4H RSI cleared above 60 and price climbed above the 50-period SMA in the 4H chart. At first this rally was vulnerable because of the previailing, but today’s price action is suggesting further ascent at least in the short-term, in the context of a bullish correction. Price bounced off 1160 a previous resistance area now treated as support. It is also where the 50-period SMA resided. A cross over and then a respect of the SMA as support is call the slingshot signal, and in this case, it signals further upside in the short-term. Gold (XAU/USD) Daily Chart 3/19(click to enlarge) The daily chart shows that if the current bullish correction does materialize, we should expect support as price approaches 1200. Here there is a cluster of resistance:1) a falling trendline,2) a previous support/resistance area3) near the 100-day SMA. We should also expect resistance as the daily RSI gets into the 50-60 area. If the market is indeed in bearish continuation for the medium-term, this short-term bullish correction might provide an opportunity for sellers to get in on a better price. Top the downside, we can expect a bearish attempt back towards 1150, then towards the 1130 low on the year.