The yellow metal is trading at $1,733 level, the FOMC meeting has boosted the price which has crossed above two upside obstacles. The gold price has retreated a little after yesterday's rally, it has come back to test and retest the broken levels, another higher high will validate a further increase towards new highs.
The dovish FED has accelerated the risk rally, gold remains a very attractive safe-haven asset, so the buyers could push the price higher as the global risk is high. The USD further drop could lift the gold price.
Gold has finally managed to break above the upper median line (UML) and above the R1 ($1,729) level, the price has come back to retest these broken levels, an increase, another higher high, will announce a further increase in the short term.
I've said yesterday that the gold price is trapped within the descending pitchfork's body, between the median line (ML) and the upper median line (UML), a valid breakout from this down channel will validate a further increase in the upcoming period.
The false breakdown below the median line (ML) of the descending pitchfork has signaled a bullish rally towards the upper median line (UML), but the breakout suggests a larger increase.
- GOLD Trading Recommendations
Long above the $1,739 high, the near-term target is seen at the R2 ($1,774) level, while the next major target is represented by the $1,800 psychological level and at the R3 ($1,804) level.
The outlook is bullish as long as the gold price is traded above the $1,700 - $ 1,666 area, so only a valid breakdown below this support zone will confirm a broader corrective phase. The broken descending channel could represent a continuation pattern.
