GOLD Reaches Another Target!

Gold price is trading at $1,852 after the failure to stay near $1,865 today's high, but the outlook remains bullish despite the current decrease. The yellow metal looks a little overbought in the short term as the rate wasn't strong enough to reach a major dynamic resistance.

The USD's drop has lifted the gold price in the short term, only strong optimism in the markets could attract the sellers on the yellow metal again. Gold is trading in the red, but the current drop could end anytime soon, so the retreat could give you a chance to go long as well.

Gold has rallied and it has increased as much as $1,865.83, but it has failed to reach the upper median line (UML) of the ascending pitchfork signaling exhaustion. The price has registered only a false breakout above the R2 ($1,861) level, so gold could come back to retest the upside 50% Fibonacci line.

As I've said in my previous analyses, another higher high, a jump above $1,818, and a valid breakout above the R1 ($1821) would validate a further increase towards the R2 ($1,861), so the last bullish momentum was expected.

Gold has decreased a little, so a minor consolidation could signal another bullish momentum if the price stays above the 50% Fibonacci line. The 50% line represents a strong dynamic support level.

Also, a valid breakout above R2 ($1,861) will validate a further increase, the upper median line (UML) remains a potential upside target and I believe that the price will try to reach it in the upcoming period.

Gold could continue to increase between the 50% Fibonacci line and the upper median line (UML), a valid breakout above the UML will suggest a strong upside rally, the $1,900 psychological level could be used as a new target.

A short term significant decline could be announced by a drop below the 50% line, by another false breakout above the R2 ($1,861), and by another failure to reach the upper median line (UML).