Gold plunged from today's low of 1,815.57 and now it is traded at 1,793.03 above 1,780.41 today's low. In the short term, the yellow metal is trapped within a range pattern. Escaping from this formation could bring new trading opportunities.
XAU/USD rebounded as the Dollar Index was into a corrective phase. Also, a new COVID-19 variant brought a risk-off sentiment into the markets, that's why the yellow metal was very attractive for buyers.
XAU/USD range pattern
Gold is trappped between 1,812.43 and 1,782.04 levels. It has registered only a false breakout with great separation through 1,812.43 and above the median line (ml) siganling that the rebound could be over.
The yellow metal tries to rebound after its sell-off, it has failed to close below the uptrend line and under 1,782.04. It could still increase as long as it stays above the uptrend line.
XAU/USD prediction
A valid breakdown below the uptrend line and under 1,782.04 could activate a deeper drop. Staying above the uptrend line followed by a valid breakout above the median line (ml) could announce potential leg higher.
The material has been provided by InstaForex Company - www.instaforex.com