Gold plunged in the short term after reaching the 1,998 level. It has failed to reach the 2,000 psychological level. Now, it's trading at 1,945 at the time of writing. XAU/USD dropped by 2.89% from yesterday's high of 1,998 to 1,940 today's low.
In the short term, it has found temporary support. After its massive drop, we cannot exclude a temporary drop. Still, don't forget that Gold could drop deeper anytime. Fundamentally, the Canadian CPI could really shake the markers today. The Consumer Price Index is expected to register a 0.9% growth versus 1.0% in the previous reporting period. Gold is used as a hedge again inflation, so, let's see how it will react.
XAU/USD Upside Invalidated!XAU/USD dropped after its failure to reach the median line (ml). Now, it's located on the 150% Fibonacci line which is seen as potential dynamic support. Breaking below the lower median line (lml) signaled more declines.
Closing below the 150% Fibonacci line may signal a downside continuation. The warning line (wl1) is seen as the next downside target and obstacle. Also, 1,916 key level could be used as a downside target if the rate continues to drop.
XAU/USD Outlook!Making a valid breakdown below the 150% Fibonacci line may signal a downside continuation. After its massive drop, personally, I would like to see a minor rebound before extending its sell-off. A temporary growth to 1,949 or higher to 1,966 could bring great selling opportunities.