The price of gold dropped deeper as the USD dominates the currency market. DXY's rebound boosted the greenback and forced the metals to drop in the short term. Now, it is trading at 1,759 at the time of writing.
XAU/USD remains bearish despite mixed US data. Philly Fed Manufacturing Index came in at -19.4 points far below the -6.0 points expected, Unemployment Claims indicator was reported at 222K compared to the 228K estimated, while Building Permits and Housing Starts came in better than expected but below the previous reporting period.
XAU/USD Deeper Drop Needs Confirmation!
You knew from my previous analysis that XAU/USD could drop deeper if it closes below the 1,766 static support. It has tested and retested this level confirming its breakdown and now it was almost to hit the 1,753 support.
The ascending pitchfork's upper median line (uml) represents dynamic support. It remains to see how it reacts around these immediate downside obstacles. False breakdowns could announce a bullish momentum.
XAU/USD Forecast!
A valid breakdown below 1,753 and through the upper median line (uml) confirms a deeper drop and brings new short opportunities.
