Gold is trading in the red at 1,843.48 level at the time of writing. The bias is bearish in the short term after failing to make a new higher high. Also, DXY's rally forced the yellow metal to lose altitude.
In the short term, a temporary decline was somehow expected after its last swing higher. It could test and retest the immediate support levels before jumping higher. As long as it stays above the near-term downside obstacles, XAU/USD could still increase. Today, the Eurozone Consumer Confidence, the US Existing Home Sales, and the New Zealand retail sales data could bring more volatility in Gold.
Tomorrow, the US and the Eurozone manufacturing and services data could be decisive. Still, DXY could be too overbought to be able to extend its growth before registering a temporary correction.
XAU/USD Bullish Bias!
Gold reached the 1,841.57 static support and the channel's upside line. A false breakdown through this confluence area could signal that the downside movement is over and that the XAU/USD could start increasing again.
In the short term, it has dropped within the descending pitchfork's body. 1,841.57 - 1,834.04 area stands as a strong demand zone. A bullish pattern here could signal a new leg higher. Only a valid breakdown below this zone could signal and could activate a larger drop.
XAU/USD plunged after retesting 1,868.62 static resistance and now it challenges 1,841.57 static support. It's trapped within a range pattern between these levels, so only a valid breakout from this formation could bring a fresh trading opportunity and a clear direction.
A bullish pattern could signal a new upside momentum, while dropping and closing below 1,834.04 may activate a larger downside movement.The material has been provided by InstaForex Company - www.instaforex.com