Forecast - 2012-12-20

I had posted on December 6th about the possibility of Cup and Handle pattern for EURUSD pair.
One thing that I missed is that the rebound happened around 50% fibo, not 38.2% as I had predicted.
But the whole scenario seems right, EUR is moving up to the highest level since April 2012. Cup and Handle pattern happened perfectly.

I also mentioned in that post, if gold broke the purple support (which it did), it might go to 1665-1675 area. And that also happens right now.

The question is, how deep will gold go south?
To get the big picture, I will have to use daily chart. Look at the chart below

The first support for this time is the white line support, which has been acting as the support lines from May 16th, 2012 . This line seems quite solid for me. Just look at how many times it supported the price (white small arrows). Most likely in my opinion, this white line will be the limit of this downtrend.
But if gold breaks this support, we still have the second support around 1630 area. Just look how strong that line (area) as the support and also resistance from Mar 14th, 2012. This line seems even stronger than the white line.

Look at another zoom-in daily chart below.

In my opinion, the intersection area between the white line and the brown line will be a good buying area IF gold ever drop that far.

My conclusion, gold is going to have a strong support. Let's see if it can hold or it will also be broken.

Trade well.

GG - 2012.12.20