- A new lower low activates more declines.
- The median line (ml) is seen as a potential target.
- The Canadian retail sales data could shake the markets.
The gold price tumbled in the short term as the US dollar appreciated. It has dropped as low as $1,965 and found strong demand.
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The metal is trading at $1,971 at the time of writing and is fighting hard to come back higher. After its strong growth, temporary retreats are natural.
However, the bias remains bullish in the short term. Fundamentally, the XAU/USD plunged right after the US Unemployment Claims economic indicator came in at 228K versus 239K expected.
The yellow metal failed to stay higher even if the Australian Employment Change and Unemployment Rate came in better than expected.
Now, it attempts to rebound and recover as the US Existing Home Sales, CB Leading Index, and Philly Fed Manufacturing Index indicators reported poor data.
Earlier, the United Kingdom Retail Sales and Public Sector Net Borrowing came in better than expected. Still, only the Canadian retail sales data could have a big impact. Retail Sales are expected to report a 0.5% growth, whereas Core Retail Sales could register a 0.2% growth.
Gold Price Technical Analysis: Corrective Downside
From the technical point of view, the XAU/USD found resistance at the 150% Fibonacci line. It has retested this dynamic resistance.
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Now it has dropped below the upper median line (uml). The 1,967 historical level stopped the sell-off. The weekly R1 (1,975) and the upper median line (uml) represent near-term resistance levels.
A new lower low, a valid breakdown below $1,967, validates more declines. If this scenario takes shape, the median line (ml) is seen as a potential downside target and obstacle. Only staying above 1,967 and jumping above the upper median line (uml) signals an upside continuation.
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