- The XAU/USD is bullish as long as it stays above the uptrend line.
- Taking out the former high activates further growth.
- The upside scenario should be invalidated only by a valid breakdown below the minor uptrend line.
The gold price is trading in the green, around $1,930. It seems determined to hit new highs if the US Dollar depreciates further.
After its strong drop, the XAU/USD was expected to develop a new leg higher. Fundamentally, the US reported mixed data in the last two trading sessions.
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Yesterday, the US ISM Manufacturing PMI was reported at 46.0 points versus 47.2 points expected, compared to 46.9 in the previous reporting period.
Furthermore, Final Manufacturing PMI remained steady at 46.3 points, ISM Manufacturing Prices came in at 41.8 points versus 44.0 points estimated, while Construction Spending reported a 0.9% growth beating the 0.4% growth forecasted.
Today, the Reserve Bank of Australia left the Cash Rate unchanged at 4.10%, as expected. Still, the volatility could be low as the US Banks will be closed during Independence Day.
Tomorrow, the OPEC Meetings and FOMC Meeting Minutes represent high-impact events and could shake the markets.
Also, the US ADP Non-Farm Employment Change, Unemployment Claims, ISM Services PMI, and JOLTS Job Openings data will be released on Thursday, while the NFP, Average Hourly Earnings, and Average Hourly Earnings figures will be published on Friday. So, the fundamentals should move the rate during the week.
Gold Price Technical Analysis: Leg Higher
Technically, the yellow metal formed a major Falling Wedge signaling a potential reversal. It has rebounded within an up channel. Hence, as long as it stays above the uptrend line, the XAU/USD should approach new highs.
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Now, it tries to stabilize above the median line (ml) of the ascending pitchfork. The $1,931 former high represents a static resistance. A new higher high can trigger further growth towards the channel’s upside line and up to the median line (uml).
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