GOLD Pressured By Dollar Strenght!

Gold is traded at $1,680 level after the failure to stabilize above the $1,700 psychological level, but the outlook is still bullish despite this minor correction. I've said in my analysis that you should be careful on the short term because the gold price could decrease a little after the last rally.

The yellow metal has decreased in the short term also because the USD has appreciated versus the other currencies. If USDX closes and stabilizes above the 100.00 psychological level, USD will increase further and the Gold could slip lower. The Gold drop could be temporary, we'll have a larger one only when the COVID-19 spread will slowdown significantly.

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Technically, the price has come back down to retest the inside sliding line (sl) of the ascending pitchfork after the false breakout above the upper median line (uml). I've said in the previous week that Gold is bullish as long as it stays above the inside sliding parallel line and above the median line (ml).

We could have a great buying opportunity if the price will be rejected by the sliding line (sl) and if it jumps and consolidates above the $1,700 level and above the weekly R1 ($1,702) level.

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A bounce back from the inside sliding line (sl) and a stabilization above the $1,700 and above the R1 ($1,702) levels will confirm a further increase towards the upper median line (uml) and towards the $1,800 psychological level.

We'll have a further drop if the price closes below the sliding line (sl), the next downside target is seen at the median line (ml). However, a reversal and a major corrective phase could appear and could be confirmed after a valid breakdown below the $1,600 level.

Gold is very heavy right now as the Dollar Index is fighting hard to come back above the 100.00 level, but you should remember that the yellow metal is still bullish and that the current drop could give us a chance to go long again.

The material has been provided by InstaForex Company - www.instaforex.com