Gold price is showing signs of revival after minor indecision below the $1,484 static support. How Gold it is trading at $1,498 and most likely it will jump above the $1,500 psychological level soon. The price has managed to increase as the USD has retreated a little versus the major currencies after the last rally. A USDX’s significant correction could push gold higher on the short term.
The yellow metal remains an attractive asset to buy in this period as the risk aversion makes gold a good investment. The COVID-19 epidemic is far from being finished, the global economy is taking a hit every day, that’s why the gold price could resume the upside movement. I’ve said in my previous analysis that the outlook on gold is bullish as long as it stays above the $1,484 level. I believe that gold will start a larger corrective phase only when this crisis is over.
Gold has pressured the $1,484 – 1,455 support area and now it tries to approach the inside sliding line (SL) of the orange descending pitchfork which represents strong dynamic resistance. The price was rejected by the median line (ML) of the descending pitchfork and by the weekly S1 ($1,455) level and now it is moving away from these support levels.
RSI could breakout above the downtrend line signaling a potential increase on the short term, we may have sideways movement between $1,455 and $1,555 levels if the price closes above the inside sliding line (SL).
I’ve drawn a dark blue ascending pitchfork hoping that I’ll catch a bullish momentum, you can see that the price has decreased to retest the lower median line (lml) to confirm it as a dynamic support. So, gold could increase as long as it stays within the minor ascending pitchfork’s body, above the lower median line (lml).
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A valid breakout above the inside sliding line (SL), descending dotted line, will signal a further increase at least till $1,555 static resistance. You should know that a larger upside movement will be confirmed only after a valid breakout above the $1,555 obstacle. If this scenario takes shape, the gold price will target the median line (ml) of the ascending pitchfork and the $1,600 psychological level.
I want to remind you that a major increase will be confirmed only if the price makes a valid breakout above the upper median line (UML) of the orange descending pitchfork, in this case, Gold will jump way above the $1,703 previous high on the medium to the long term.
The potential increase will be invalidated by a valid breakdown below the lower median line (lml) of the dark blue ascending pitchfork and below the weekly S1 ($1,455), you can sell it again below these levels.
The material has been provided by InstaForex Company – www.instaforex.com
Source:: GOLD Attracts New Buyers