The price of gold developed strong growth in the short term but now it reached a resistance zone. It's located at 1,816 at the time of writing, below today's high of 1,822. After its strong growth, the rate could come back to test and retest the immediate downside obstacles before resuming its growth.
The bias remains bullish, so minor retreats could announce a new upside movement. XAU/USD extended its growth in the short term after the US Unemployment Claims came in at 225K in the last week versus the 216K in the last reporting period.
Today, the US Chicago PMI is seen as a significant economic indicator and is expected to come in at 40.1 points versus 37.2 in the previous reporting period. Worse than expected US data could help the yellow metal to jump higher.
XAU/USD Leg Higher!
XAU/USD is bullish as long as its stays above the uptrend line. After its current growth and after registering only a false breakout with great separation above the R1 (1,820), the rate could come back to test ad retest the 1,810 before developing a new bullish momentum.
The 1,824 former high represents an upside target and obstacle. As you can see on the H1 chart, the rate failed to make a new lower low signaling strong upside pressure. Staying near the resistance area may announce an imminent breakout.
XAU/USD Outlook!
Making a valid breakout above 1,824 could open the door to further growth towards the R2 (1,842) and up to the upside line. This represents a buying signal.
Also, coming back to test and retest 1,810 or 1,800 and the uptrend line could bring new longs.
