Gold Technical Analysis: dip-buying to help limit immediate sharp downfall

   •  Technical buying above a short-term descending trend-channel helped build on overnight goodish rebound from fresh YTD lows and move past 23.6% Fibonacci retracement level of the $1309.30-$1237.97 recent downfall.

   •  A modest pickup in the USD demand caps any further up-move, albeit positive short-term technical indicators suggest dip-buying interest at lower levels and might limit any meaningful downside.

   •  Traders might also opt to lighten their bearish bets ahead of this week's important US releases - FOMC meeting minutes and NFP, and hence, a follow-through up-move, led by some fresh short-covering, now looks a distinct possibility.

Gold 4-hourly chart

Spot Rate: $1256.02
Daily Low: $1252.03
Daily High: $1261.12
Trend: Slightly bullish

Resistance
R1: $1261 (current day swing high)
R2: $1265 (38.2% Fibo. level)
R3: $1273 (20-day SMA)

Support
S1: $1252 (descending trend-channel resistance break-point)
S2: $1247 (horizontal zone)
S3: $1238 (YTD low set yesterday)