The primary view on gold has not changed and this is a daily complementary analysis for shorter-term trades. Gold is entering into a deeper correction which initially targets 23.6% retracement of the 2016 rally and lower levels later on.
We were able yesterday to catch a $5 move (entry $1325), however rally stopped exactly at the green channel as we stated in yesterday's analysis (second chart) and from that moment the price action has been erratic.
Gold Daily Chart - July 26, 2016
There is no doubt that this action is part of a bigger corrective move, however it does not mean we cannot take advantage in cases when risk reward is favorable. What helps gold on the bullish case is SMA 200 as support and the fact that several higher lows are made once price hit SMA 200. In addition, it did not make a new low (below $1318) and divergence persists on the bigger picture.
Gold 4H Chart - July 26, 2016
As long as the diagonal trend line holds, temporary bullish scenario is on the table. Important levels on the upside are $1333, $1338, and $1340-$1342. A move above $1350 is unlikely given the technicals alone, but taking into consideration the fundamental releases scheduled starting 1 hour from now, we might experience huge swings.
Gold 1H Chart - July 26, 2016