The XAU/USD crashed in the short term but this could be a short-lived phenomenon as the rate reached strong downside obstacles. It was located at 1,803 at the moment writing and was struggling to come back higher. After its strong sell-off, the throwback is natural.
It remains to see how it will react after the US Pending Home Sales publication. Better than expected US data could lift the greenback and could punish the price of gold. Tomorrow, the US Unemployment Claims could represent an important event, while on Friday, the Chicago PMI could shake the yellow metal.
XAU/USD Bounce Back!
As you can see on the H1 chart, the yellow metal crashed and now it is right below the weekly pivot point of 1,802 and under the 1,800 psychological level. It registered only a false breakdown and turned to the upside.
The immediate downtrend line represents a dynamic resistance. The level of 1,810 is seen as an upside obstacle as well.
XAU/USD Outlook!
Staying below the downtrend line and making a new lower low activates more declines. Dropping below 1,800 and making a bearish closure below 1,799, today's low, should open the door for more declines. This is seen as a selling signal.
