Gold has tumbled aggressively in the last days as the USDX has rallied and reached fresh new highs. The yellow metal remains an attractive safe-haven instrument in this crisis period, the risk aversion could attract new buyers, which could push the gold price higher again after the amazing drop.
The US dollar index has rocketed as much as 101.76 in yesterday's session, but today has opened with a huge gap down, signaling exhaustion, the overbought condition, but you should know that the outlook remains bullish on this index.
Gold continues to pressure the $1,484 static support, I said yesterday that the price remains under massive selling pressure as long as it stays below the inside sliding line (SL). A valid breakdown below the $1,484 level and below the S1 ($1,455) level will confirm a broader corrective phase. This scenario could happen if the USDX reaches fresh new highs.
The price could develop bullish momentum if it fails to reach the median line (ML) again and to stabilize below the $1,484 level. Another false breakdown could send the price above the inside sliding line (SL), which could represent a signal that gold will come back higher towards the upper median line (UML).
- TRADING & INVESTING RECOMMENDATIONS
It is not advised to buy it as long it is traded below the inside sliding parallel line (SL) because the selling pressure is still high and it could drop anytime. GOLD remains an attractive buy on the medium to the long term, despite the current drop. The correction is natural and it could be only temporary, that's why we could search for long opportunities around 1484 critical support.
A potential increase could be invalidated by a valid breakdown below the weekly S1 ($1,455) level. So, the support is seen at $1,455 - 1,451 area and at the median line, while the near-term resistance is represented by the sliding line (SL).
In the case of bullish momentum, the upside targets are seen at $1,555, $1,600 psychological level and at the upper median line (UML). A major increase will be confirmed only after the price escapes from the descending pitchfork's body after a valid breakout above the UML.
