Gold has finally managed to rebound and to signal a potential larger upside movement after the temporary correction. It is trading at $1,560, right above the $1,555 broken resistance. A consolidation above this level will signal another bullish momentum towards $1,600 psychological level.
As I've said in my previous analysis, the yellow metal remains an attractive buy asset in this risk aversion situation. Gold could jump way above $1,703 high soon. COVID-19 epidemic continues to spread aggressively, making new victims and economic damages, so the investors and traders are buying gold to protect their money.
- GOLD Still Bullish!
Technically, the gold price has rallied after it tested and retested the lower median line (lml) of the minor black ascending pitchfork, confirming this line as strong dynamic support. I've said in my analysis that Gold maintains a bullish outlook as long as it is traded above the $1,484 static support, the false breakdown with a great separation below the lower median line (lml) and the failure to retest the lower median line (LML) of the descending pitchfork has signaled that the corrective phase is complete and that the bulls will take the lead.
Gold has increased as much as $1,584 today, it could approach and reach the next target at $1,600 if it stabilizes above the $1,555 level and above the R1 ($1,557) level. The price has found a temporary resistance at the inside sliding line (sl) of the minor black ascending pitchfork, but the outlook is bullish after the breakout above $1,555 and above the weekly R1 ($1,557) level.
The price has moved sideways between the weekly S1 ($1,445) and R1 ($1,557) levels, Gold should resume the upside movement if this breakout is validated. The next upside targets are seen at the upper median line (uml) of the ascending pitchfork, at $1,600 psychological level and higher at the upper median line (UML) of the orange descending pitchfork.
- TRADING RECOMMENDATIONS
A consolidation above the $1,555 level will give us a great chance to go long as well, but you should keep in mind that only a valid breakout above the $1,600, above the upper median line (uml) and above the upper median line (UML) will validate a larger increase. The major upside target remains at $1,700 - $1,703 area.
The outlook on Gold is bullish, a larger increase could be invalidated only by a valid breakdown below the lower median line (lml) of the minor black ascending pitchfork and below the $1,484 critical support, this scenario is less likely to happen.
The material has been provided by InstaForex Company - www.instaforex.com