Gold is trading at 1,818 level below 1,822 today's high. The yellow metal has rallied in the short term after invalidating a potential drop. The price was boosted also by the USD's decline.
The price has reached an important upside target after escaping from a continuation pattern. Yesterday's rally was somehow expected after registering only false breakdowns below the immediate support levels. It has increased more than 1.5% in the last trading session confirming strong buyers in the short term.
XAU/USD At Confluence Area!
Gold has finally managed to take out the 1,800 static resistance, psychological level, and now is challenging the ascending pitchfork's median line (ml) and the descending pitchfork's upper median line.
It remains to see how it will react after the US NFP, Unemployment Rate, and Average Hourly Earnings data. The volatility will be higher during the US session, so you should be careful.
Forecast!
A minor drop from the confluence area formed at the intersection between the median line (ml) and the upper median line (UML) could help the buyers to catch a new upside momentum.
Gold could decrease to retest the R2 (1,806) or the 1,800 before resuming its upwards movement.
Though, USDX's further decline in the coming hours could force XAU/USD to resume its growth without registering a temporary decline. A valid breakout through the confluence area, above R3 (1,823) should signal more gains.
The ascending pitchfork's upper median line (uml) is seen as a major upside target if the yellow metal resumes its growth.
The material has been provided by InstaForex Company - www.instaforex.com