Gold price is trading in the red and it seems heavy enough to drop towards the near-term support levels. The yellow metal could slip lower if the USDX bounces back in the short term. You should be very careful today as the eurozone, UK, and the US will release the Flash Manufacturing PMI and Flash Services PMI data, Gold could shine again if the numbers will produce a big surprise.
The gold has signaled that the buyers are exhausted after the last rally, it is traded at $1,737, but the pressure seems to be high in the short term. You should know that the outlook is still bullish on the medium to the long term, even if the metal makes a minor drop.
Monday's bearish candle has signaled an overbought on the Daily chart, the gold has increased again in the last two days, but it has failed once again to reach the R1 ($1,767) level and the upper median line (uml) of the minor orange descending pitchfork signaling a selling pressure.
RSI indicates a bearish divergence, but as I've said in my previous analyses, it is premature to talk about a larger drop as long as the price is traded above the inside sliding line (SL) of the ascending pitchfork.
I've drawn a minor descending pitchfork, hoping that I'll catch a potential drop, so the Gold price could decrease as long as it stays under the upper median line (uml). The failure to retest this dynamic resistance could bring a sell-off in the short term.
- GOLD Trading Tips
Gold price could drop towards the $1,700 today if the US data comes in as expected or even better, the failure to reach and retest the upper median line (uml) has signaled a drop at least till the $1,727 low, the next downside targets are seen at the sliding line (SL), at the $1,700 level, and lower at the median line (ml) of the minor descending pitchfork.
A significant drop could be validated by a valid breakdown below the inside sliding line (SL), in this case, the median line (ML) and the PP ($1,666) could be used as targets. The gold price reversal will be suggested only after a valid breakdown below the median line (ML) of the ascending pitchfork and below the $1,666 level.
If you want to buy gold again, maybe you should wait for a valid breakout above the upper median line (uml) of the minor orange descending pitchfork and above the R1 ($1,767) level, the next upside targets are seen at the upper median line (UML), at the $1,800 level, and higher at the $1,848 level.
