- The bias remains bullish despite the current leg down.
- The UK inflation figures could have a big impact.
- False breakdowns below the median line (ml) could bring a new leg higher.
The gold price rebounded above the $2,000 mark. However, the metal lacks follow-through momentum. It’s trading at $2,003 at the time of writing.
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XAU/USD rallied in the short term only as the USD depreciated a little. Fundamentally, the US Empire State Manufacturing Index came in better than expected yesterday.
Today, the Chinese and UK economic data came in mixed. In addition, the German ZEW Economic Sentiment and Eurozone ZEW Economic Sentiment reported poor data.
Earlier, the Canadian Consumer Price Index reported a 0.5% growth versus the 0.6% growth expected and after the 0.4% growth in the previous reporting period.
The Median CPI came in better than expected while Trimmed CPI and Common CPI disappointed.
Surprisingly or not, the XAU/USD dropped a little in the last hours even if the US reported poor data compared to the previous reporting period.
Tomorrow, the UK Consumer Price Index represents a high-impact event and could really shake the markets.
The indicator is expected to report a 9.8% growth in March versus the 10.4% growth in February.
Gold price technical analysis: Sellers active around $2,000
The XAU/USD crashed in the short term after failing to stay above the Rising Wedge’s upside line.
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It has ignored the uptrend line and it has dropped below the median line (ml). Now, it has tried to rebound but the downside pressure remains high, it could drop deeper anytime as long as it stays below the 2,009 and under the weekly pivot point of 2,011.
Still, retesting the median line (ml), registering only false breakdowns below this dynamic support may announce a new bullish momentum.
The bias remains bullish, despite the current leg down. DXY’s deeper drop (USD’s depreciation) should force the price of gold to approach and reach new highs again. The descending pitchfork’s upper median line (uml) represents an upside target and obstacle.
On the contrary, a valid breakdown below the median line (ml) and a new lower low activates more declines.
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