Gold is now trading at $1,782 and continues to be under high selling pressure after plunging under $,800 psychological level. The price has rebounded in the short term only because the USD has retreated, depreciated, a little after its most recent appreciation.
XAU/USD could drop deeper if the USDX resumes its short-term bounce. Some good US data which is due later today could lift the greenback and could send the price of gold towards fresh new lows.
The yellow metal is located in the seller's territory so it could move down anytime. The current rebound could help us to catch a new bearish momentum.
XAU/USD Vulnerable To Slide Further!
Gold has found temporary support on the inside sliding parallel line (SL) of the descending pitchfork and now is back above the S2 ($1,781) level. The descending pitchfork's median line (ML) represents an immediate resistance.
A false breakout above the median line (ML) or through the $1,800 psychological level brings a great selling opportunity. The quote could only test and retest the near-term resistance levels before dropping deeper.
Being within a down channel pattern between 50% and SL, maybe you're wondering if the price could come back towards the channel's resistance represented by the 50% Fibonacci line. This scenario could take shape only if the yellow metal comes back and stabilizes above $1,800.
Gold Trading Tips!
Sell a false breakout with great separation above the median line (ML) or a major bearish engulfing printed on this dynamic resistance.
Also, sell a bearish closure below $1,769 yesterday's low using the S4 ($1,729) as a downside target.
Buying will be possible only if XAU/USD jumps and consolidates above $1,800 level.
