Gold prices rallied strongly, breaking the soft 1,295 resistance and recuperating a large portion of the losses incurred on Tuesday. However, volume traded from yesterday is much lesser compared to the sell-off, suggesting that this rally is merely corrective and not a true bullish reversal. Given that prices also failed to climb back to pre sell-off levels, the “early bearish signal” discussed yesterday  remains in play even though price has climbed up above 1,300.
Currently price is straddling a newly formed descending trendline lower. Even though Stochastic has rebounded higher recently, we are currently pointing lower once again, suggesting that the bearish cycle which started during early US session yesterday is still in play since Stoch curve did not enter into Oversold region earlier.
In terms of bearish targets, the most obvious one will be 1,295 once again. It is possible that US bullish sentiment  which drove Crude Oil higher yesterday  may impact Gold again today, but even if price manage to breach above the descending trendline, 1,320 will continue to exert bearish pressure and may send price lower.
Weekly Chart is obviously less bearish than yesterday, but the overall bearish ingredient remains in place. Stochastic readings continues to stay below the 60.0 mark, while current price level is also below the Doji candle body 2 weeks ago which was the start of the slight bullish corrective move which led prices to a high of 1,352 this week. By trading below this key level, the bullish correction move has been invalidated and initiative will be on the bearish side.
Fundamentally, traders should continue to watch out for institutional flows. There isn’t any reports/news about institutions buying back in yesterday’s run up, and hence the likelihood of a strong sustainable rally up is diminished. This is not saying that current bullish correction cannot evolve into something that has stronger follow-through. Certainly, if price manage to stay supported around current levels and allow for a re-test of the 1,330-1,345 consolidation level, we could entice institutional speculators back into the game again.
GBP/USD – Continues to place pressure on Resistance Level at 1.6250 
AUD/USD – Continues to struggle at Resistance at 0.94 
EUR/USD – Moves to highest since February above Resistance at 1.3550