XAU/USD plunged today and was traded at 1,776 at the time of writing above the 1,773 daily low. The rate returned to test and retest the near-term resistance levels before resuming its sell-off.
The yellow metal crashed as the US dollar Index rallied forcing USD to appreciate versus most of its rivals. Fundamentally, the US Prelim UoM Consumer Sentiment came in better than expected at 55.1 points above the 52.5 expected. This could be a reason why USD appreciated and XAU/USD dropped.
Tomorrow, the Australian Monetary Policy Meeting Minutes and the Canadian inflation data could have a big impact on XAU/USD.
XAU/USD Strongly BearishOn Friday, I talked about a potential further growth after invalidating its breakdown below the uptrend line. Still, it has failed to stabilize above the 1,800 psychological level, signaling exhausted buyers again.
It has registered an aggressive breakdown through the uptrend line and it has taken out the 1,783 support as well.
XAU/USD OutlookA new lower low, breaking below 1,783 and retesting this level may signal more declines. It has registered a false breakout through this level, so the bias remains bearish. Now, it retests the S1 (1,779), a new lower low, dropping and closing below 1,773 could bring new short opportunities with a potential downside target at 1,765.