GOLD (Futures): The outlook for gold continues to point lower near term as the commodity remains weakened and now targets its long-term rising channel presently at $1,079.08 an ounce. This is coming on the back of its loss of upside momentum at the $1,144.88 level, its March 1 high.

For a chart of gold, click here.

Gold still retains its broader medium-term uptrend bias while holding above its long-term rising trend line and we expect that level to cap declines and turn the commodity higher if tested. However, should that strong support level break, a technical damage will be caused and further weakness will be expected towards the $1.044.20 level, its 2010 low. Its daily stochastics are supportive of this view.

Alternatively, in order for the commodity to totally offset its current downside pressure, a clean break and close above the $1,133.18 level, its March 17 high, is required to open the door for more upside gains towards $1,144.88 where a break will aim at the $1,161.88 level, its Feb. 11 high ahead of its psychological level at $1,200 and then the 2009 high at $1.226.33.

In a nutshell, the commodity remains vulnerable to the downside as it now eyes its long-term rising trend line.

Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces The Professional Suite for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.

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