29.10.202009:34 Forex Analysis & Reviews: GOLD - Could Buyers Take It Higher?

XAU/USD plunged in yesterday's session due to USDX's short-term rally. The yellow metal lost its chance to stabilize above the $1,900 psychological level signaling a high selling pressure.

Still, the price of gold maintains a bullish perspective as long it stays above the $1,862 - $ 1,848 area. The ECB could bring high action on Gold today, even if the monetary policy remains unchanged.

Also, the US is to release its Advance GDP, Unemployment Claims, and the Pending Home Sales. USD's appreciation after today's high impact events could force Gold to drop deeper into the seller's territory.

GOLD Upside Still Safe!

Gold has found strong resistance at the median line (ml) of the minor ascending pitchfork and now it could hit the lower median line (lml) anytime. Technically, it was somehow expected to increase after escaping from a major ascending triangle but the failure to make another higher high, jump above $1,933 has signaled the current decline.

The rate has found temporary support at the S2 ($1,872) level, right above the black downtrend line. The upside is safe as long XAU/USD stays above the pitchfork's lower median line (lml) and above the $1,862 level.

A valid breakdown through these downside obstacles suggests selling again as the price goes for new lower lows.

• XAU/USD Trading Tips

We'll have a long opportunity if Gold makes a false breakdown with great separation below the lower median line (lml) and under the $1,862 level. Also, a major bullish engulfing printed on these downside obstacles could suggest buying.

Technically, a larger upside movement will be validated only by a valid breakout above the median line (ml) and above the $1,933 level. The major upside targets are seen at $2,000 and higher at the $2,075 all-time high.

Sell a bearish closure below the $1,848 level with an immediate downside target at the $1,800 level.