FX.co ★ XAU/USD retesting buyers, upside scenario intact

The price of gold crashed in the last hours and now is trading at 1,954 at the time of writing. XAU/USD turned to the downside as the DXY rebound after the US economic data. Still, Gold could extend its short-term leg higher despite minor retreats.

Fundamentally, the yellow metal took a hit from the US Prelim UoM Consumer Sentiment which came in at 63.9 points above 60.1 points estimated and compared to the 59.2 points in the previous reporting period.

XAU/USD Challenges Support!

From the technical point of view, XAU/USD failed to hit the 1,970 static resistance and now it challenges the 1,954 - 1,951 support zone. The median line (ml) of the ascending pitchfork represents key dynamic support.

As long as it stays above it, the price of gold could develop a new bullish momentum and could extend its short-term swing higher.

XAU/USD Outlook!

False breakdowns below the median line (ml), testing and retesting this obstacle may bring new longs.

A new lower low, a bearish closure below 1,951 activates a larger drop and is seen as a selling opportunity.