The price of gold rallied after ending its temporary retreat. The sentiment changed after yesterday's rally, but we still have to wait for a valid breakout above the immediate upside obstacles before considering going long.
DXY's sell-off helped XAU/USD buyers to push the yellow metal higher. Surprisingly or not, the price stays right below 1764.35 today's high even if the US data have come in better than expected. Most likely the Dollar Index was too overbought to be able to come back higher so soon.
The US ISM Manufacturing PMI was reported higher at 61.1 points versus 59.6 expected and compared to 59.9 in the previous reporting period. The Revised UoM Consumer Sentiment, ISM Manufacturing Prices, Personal Spending, and the Core PCE Price Index have come in better than expected as well.
XAU/USD Imminent Breakout!
Gold has finally reached the downtrend line again. It has decreased a little to test and retest the 1750.74 historical key level. As you already know from my analysis, the price of gold could develop a broader upwards movement, a bullish reversal, if it makes a valid breakout through the downtrend line.
Personally, I've drawn an ascending pitchfork hoping that I'll catch a new swing higher. Technically, the price has registered a false breakdown with great separation through the lower median line (lml) when he tried to retest it signaling strong momentum.
Gold Outlook!
Jumping, closing, and stabilizing above the downtrend line may announce an upside continuation. A valid breakout could be seen as a long opportunity.
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