FX.co ★ Gold bullish pattern activated

Gold is trading in the green at 1,936 at the time of writing below 1,941 today's high. XAU/USD slipped lower after Powell's speech but the bias is bullish in the short term after escaping from the flag pattern.

Gold developed a corrective phase after the FOMC meeting. As you already know, the Fed hiked the key rate from 0.25% to 0.50% on Wednesday. The hawkish stance of the Fed and hope of diplomatic solutions pushed gold down. Earlier, Powell's remarks about further rate hikes and inflation triggered a drop in gold. On Wednesday, the UK inflation data could bring some volatility.

XAU/USD Challenges Resistance

As you can see on the H4 chart, gold found support at 1,918.01. It escaped from the downward channel pattern signaling that the downside movement ended. Stabilizign above the weekly pivot point of 1,934 may activate an upside continuation.

In my opinion, only a new lower low, a valid breakdown below 1,918 could invalidate an upwards movement.

XAU/USD Prediction

A new higher high, jumping and closing above 1,941 today's high may activate an upside movement a least towards 1,959 -1,965 area.