XAU/USD erased yesterday's gains and now is trading at 1,921 at the time of writing. The downside pressure is high as the DXY tries to rebound. The bias remains bearish in the short term despite temporary rebounds.
Fundamentally, the SNB increased the SNB Policy Rate by 25 bps as expected, while the BOE delivered a 50 bps hike even if the traders expected only a 25 bps hike. Earlier, the US Existing Home Sales and CB Leading Index came in better than expected and could be bad for the XAU/USD.
XAU/USD Strong Sellers!
Technically, XAU/USD failed to retest the descending pitchfork's upper median line (UML) signaling exhausted buyers and strong downside pressure. Now, it has reached the 1,919 yesterday's low again.
This represents a downside obstacle. As long as it stays below the UML, the yellow metal should extend its drop.
XAU/USD Outlook!
A bearish closure below 1,919 activates a further drop and is seen as a selling signal.
