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XAU/USD is trading back above the $1,900 psychological level, at $1,908, signaling strong bulls and a potentially significant upside momentum. The confluence area was taken out, so the gold price could approach and reach fresh new highs.
Gold rallies on USD's current decline. Unfortunately, the greenback was weakened by poor Unemployment Claims data. The economic indicator increased to 898K in the last week, even if the traders had expected to see a drop to 810K jobs.
Today, the US retail sales data, Capacity Utilization Rate, Industrial Production, Prelim UoM Consumer Sentiment, and the Business Inventories could shake the markets. Gold could register a sharp move if the US figures disappoint later today.
Technically, the price of gold is expected to increase in the short term after the seller's incapacity to keep in under the $1,900 psychological level. Gold has decreased only to retest the broken resistance levels and now it seems determined to jump higher.
A valid breakout above the median line (ml) suggests buying as the price should extend its bullish momentum.
A broader upside movement will be validated by a new higher high. So, a bullish closure above $1,933 brings a great long opportunity. If you want to buy it sooner, you should wait for a valid breakout above the Pivot Point ($1,911) and above $1,912 high.
The bullish scenario could signal a potential growth at least till the upper median line (uml) of the ascending pitchfork, up to the $2,000 level.
Sell only if XAU/USD drops below $1,881 former low. Actually, a larger drop will be validated by a breakdown below the lower median line (lml) of the ascending pitchfork.
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