GOLD Edges Higher!

Gold price keeps rallying and it seems determined to approach and reach new highs. The price has stabilized above the $1,700 psychological level signaling a further increase. Gold edges higher as the USD drops versus the major currencies after the FOMC. The USD drop is pushing the gold higher in the short term.

The Federal Reserve has maintained the Federal Funds Rate steady at 0.25%, Jerome Powell has declared that they will use all available tools to fight the COVID-19 pandemic effects. I’ll repeat myself by saying that the yellow metal remains an attractive buy, investment, in this risk aversion situation.

Technically, the gold price moves sideways trying to accumulate more bullish energy before it will explode again. The outlook is bullish as long as it stays above the $1700 psychological level and above the sliding parallel line (SL) of the ascending pitchfork.

Gold has developed a minor triangle, it has failed to come back to retest the downside line signaling a bullish pressure, so an upside breakout will validate a further increase at least till the upper median line (UML) of the ascending pitchfork.

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A valid breakout from the current triangle will open the door for a further increase towards the upper median line (UML) and towards the $1,800 psychological level. Gold is expected to increase further as long as it is traded above the inside sliding parallel line (SL – ascending dotted line). I believe that a corrective phase could be confirmed only after a valid breakdown below the $1,671 and below the median line (ML).

The gold price consolidates above the R1 ($1,702) level, so it could increase towards the R2 ($1,828) level if the ECB will be more dovish than expected today. A valid breakout above the upper median line (UML) could really signal a larger increase.

The material has been provided by InstaForex Company – www.instaforex.com

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