- The bias remains bearish as long as it stays below the downtrend line.
- Only a valid breakout through the downtrend line validates a larger growth.
- The FOMC Meeting Minutes should bring sharp movements today.
The gold price bounced back, trading at $1,905 at the time of writing. Greenback’s temporary retreat helped the yellow metal to rebound in the short term.
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Still, the bias remains bearish, so more declines are still possible. The USD’s rally could force the price of gold to drop again.
Fundamentally, the US Retail Sales reported a 0.7% growth versus the 0.4% growth estimated, while Core Retail Sales increased by 1.0%, beating the 0.4% growth forecasted in the last trading session.
Furthermore, the Canadian Consumer Price Index registered a 0.6% growth, beating the 0.3% growth expected.
Today, the RBNZ left the monetary policy unchanged. The Official Cash Rate remained at 5.50% as forecasted, while the UK CPI and Core CPI reported higher-than-expected inflation.
Later, the US will release the Industrial Production, Capacity Utilization Rate, Housing Starts, and Building Permits indicators that could come in better than the previous reporting period.
Still, the FOMC Meeting Minutes is seen as the most important event. A hawkish report could boost the USD and push the XAU/USD down again.
Gold Price Technical Analysis: Rebound in play
From the technical point of view, the price action developed a major Falling Wedge pattern which is still far from being confirmed.
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As long as it stays below the downtrend line, the price could drop again as the outlook is bearish. As you can see on the hourly chart, the XAU/USD found strong support on the downside line and the S1 (1,900).
The yellow metal registered only false breakdowns signaling that the sell-off ended and buyers could take it higher.
Still, only taking out the downtrend line should announce a larger rebound and could bring us new longs.
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