03.06.202010:54 GOLD - Can The Risk Rally Continue?

Gold has found a tough resistance and now is trading in the red again, but the current drop could be only a temporary one if the near-term support levels holds. The yellow metal price has rallied in the short term from the $1,700 level as the global risk is high.

Gold is trading at $1,720. Technically, it has shown some overbought signals last weeks, but we need a confirmation that the yellow metal will develop a significant corrective phase. The price seems very heavy right now, but the outlook is bullish as long as the price is trading above the $1,700 psychological level.

Exchange Rates 03.06.2020 analysis

The gold price was rejected by the upper median line (UML) of the minor dark blue descending pitchfork and now is pressuring the Pivot Point ($1,720) level. It could drop deeper if it closes and stabilizes below the weekly PP, the S1 ($1,702), and the $1,700 levels could be used as near-term targets.

A further increase will be confirmed by a valid breakout above the upper median line (UML), such a potential breakout will signal a breakout above the R1 ($1,746) level, signaling a significant increase towards $1,800 psychological level.

  • Gold Trading Tips

Gold will register a broader drop if it closes and stabilizes below the $1,700 level and if it makes another lower low, to drop below the $1,693 level. The median line (ML) of the descending pitchfork, the $1,666, $1,555, and the $1,484 levels represent major downside targets as well as downside obstacles.

The yellow metal could resume the major uptrend if the current drop is only temporary. Another rejection or a false breakdown below $1,700 could bring a buying opportunity. Still, we may have a great long opportunity after a valid breakout above the upper median line (UML) and above the R1 ($1,746). The R2 ($1,764), R3 ($1,790), and the $1,800 levels are seen as targets.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Performed by Ralph Shedler,
Analytical expert
InstaForex Group © 2007-2020
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