Gold accelerates its drop after yesterday's aggressive breakdown below $1,900 psychological level. It's trading at $1,876 and it seems strongly bearish on the H4 chart. The USD's appreciation versus its rivals could push the yellow metal towards $1,800 level.
The rate has escaped from a symmetrical triangle and from an extended sideways movement, so the current drop is natural. The risk-off rally makes gold vulnerable in the short term.
The price of gold has managed to close below the $1,900 level and under the S3 ($1,890) static support. I've said yesterday that the price should extend its sell-off if it closes below these levels.
A bearish closure below $1,882 Monday's low could represent a strong selling signal. Gold could rebound in the short term only if the USDX will retreat a little after the Euro-zone and the US manufacturing and services data.
- GOLD Trading Tips
Sell a bearish closure below $1,880 with a downside target somewhere at $1,800 psychological level. Please keep in mind that $1,862 could stop the downside momentum. Also, the former downtrend line could be used as a downside target.
The bearish scenario could be invalidated by a strong bullish engulfing with it will invalidated the breakdown below $1,900 and could signal another bullish momentum.
