How Long The GOLD Drop Could Be?|KOL Analysis•Olimpiu Tuns

Gold has decreased as much as $1,864 level today, the massive drop was signaled by Fridays bearish engulfing pattern. Now, is traded at $1,893 level, right below the $1,900 psychological level, a false breakdown below this obstacle will signal the end of the corrective phase.

The yellow metal has plunged after some rumors that Russia may have a COVID-19 vaccine, also, the USDs appreciation pushed gold price lower in the short term. Still, a coronavirus second wave, the high global risk, and the US-China tensions could attract buyers again.

● XAU/USD Challenging Static Support!

Gold has developed a bearish engulfing reversal pattern on Friday, right on the 250% Fibonacci line signaling a potential drop in the short term. The rate is pressuring the $1,900 psychological level, a valid breakdown will suggest further drop towards the $1,800 level.

The price has registered an aggressive drop in yesterday‘s session, from $2,027 to $1,901 level. Yesterday’s approx 6.22% drop has added panic into the market, the price has extended its sell-off today, the price is very heavy and it could drop deeper anytime.

Gold stays around $1,900 level, for now, stabilization below this downside obstacle could signal further decline. The rate was almost to reach the upper median line (UML) of the ascending pitchfork which is seen as a dynamic support.

It is traded below the 150% Fibonacci line, the selling pressure will remain high as long as the price will be traded below this broken dynamic support. Only a false breakdown below the $1,900 level followed by a quick rally could announce that the drop was finished.

The US is to release the CPI which is expected to increase by 0.3% in July and the Core CPI, the indicator may register a 0.2% growth. A bigger growth could boost the USD and could bring more sellers on gold.

● GBP/USD Seems Undecided!

GBP/USD continues to stay near the 78.6% level, above the median line (ML) of the major ascending pitchfork signaling bullish bias. The pair could resume its upside movement as long as it stays above the median line (ML). Another higher high will suggest buying GBP/USD as the pair will be expected to reach fresh new highs.

A drop below this line followed by several retests could offer us a short opportunity. The median line retest or a false breakdown with great separation will suggest buying again. The rate is trading in the red as the USDX is bullish right now.

The Pound could recover in the upcoming hours as some of the UKs data have come in better than expected. The GDP rose by 8.7%, beating the 8.1% estimate and the 2.4% growth in the former reading period, while the Prelim GDP was reported at -20.4%, better compared to the 20.5% drop estimate.

The Manufacturing Production increased by 11.0% in June, while the Industrial Production rose by 9.3%, more versus 9.2% estimate.

● NZD/USD Bearish Post RBNZ!

NZD/USD is bearish and it could extend its current drop as the RBNZ has expanded its QE program up to NZD 100 billion. The pair has escaped from a major ascending channel, so it could drop deeper also if the USDX will jump higher in the short term.

The pair has retested the upper median line (UML) of the major descending pitchfork signaling further downside movement. The 23.6% (0.6424) level is seen as the first downside target, while the second target could be at the 38.2% (0.6242) level. Only a valid breakout above the UML will invalidate a further corrective phase.

{About the Author}

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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