This week saw the XAO pull back strongly off the top off the current uptrend channel. Will next week continue the pull back or is there enough support to have it bounce back.

The pull back this week is a continuation of the uptrend channel. This was stronger than the previous support level at 3900. As it broke through the support line it is likely continue the pull back to the bottom of the channel before continuing up.

A less likely but possible move would see the XAO bounce this week as it has paused on a 61.8% Fibonacci retracement level which could provide support.

Overall, the pull back that has happened is still part of the bullish run over the last 3 months. However should the XAO break down and out of the current channel, we will likely see 3700.

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