Gold Reached A Major Target!

Gold dropped as much as 1,677 level today and now it tries to rebound in the short term after the massive sell-off. Still, the bearish pressure is high, so the price could drop anytime again.

You should be careful as the yellow metal could resume its downside momentum if the US Dollar continues to appreciate versus its rivals. The US ADP Non-Farm Employment Change will be released later today and is expected around 552K versus 117K in February.

USD may resume its appreciation versus its rivals if the US data comes in line with expectations or better till the end of the week. This scenario could force the price of gold to decline further.

XAU/USD Rebound?

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XAU/USD plunged after escaping from the former narrow range. The aggressive breakdown through 1,719 static support has activated the sell-off.

Technically, the decline was expected after registering a new lower low, after closing below 1,719. Now is traded at 1,684 level above the S4 (1,681) level. Personally, I still believe that the price could reach and challenge 1,676 lower low despite the current rebound.

Actually, the temporary bounce back is somehow expected after yesterday's aggressive downside momentum. A rebound could help the traders to sell XAU/USD again.

Dropping and stabilizing below 1,676 lower low, critical support, may signal that the price of gold will continue to decline.

Forecast!

A temporary rebound is natural in the short term and we should try to search for other short opportunities after the current bounce back ends.

Dropping and stabilizing below 1,676 static support could be seen as a bearish signal with a major downside target at the downside sliding line (SL1).

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

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