XAU/USD plunged in the last hours and now is trading at 1,945. Today, the fundamentals moved the rate down. You knew from my previous analysis that the yellow metal moves somehow sideways in the short term and that we need strong confirmation before taking action.
Surprisingly or not, Gold dropped even if the US CPI m/m reported only a 0.1% growth versus the 0.2% growth estimated, while CPI y/y came in at 4.0% below the 4.1% growth estimated. Tomorrow, the FOMC Economic Projections, FOMC Statement, and FOMC Press Conference should bring sharp movements again.
XAU/USD Challenges Support!
Technically, XAU/USD turned to the downside after registering only a false breakout with great separation above 1,970 static resistance. Now, it challenges the lower median line (lml) which represents dynamic support.
The 1,940 former low represents a downside obstacle. Its failure to reach the median line (ml) in the last attempt signaled strong downside pressure.
XAU/USD Forecast!
A bearish closure below 1,940 activates more declines and represents a selling signal.
