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Gold is trading lower at 1,731 and it seems heavy enough to register a breakdown from a minor up channel. The temporary rebound could be over if the rate escapes from the continuation pattern.
The yellow metal could start dropping again if the USDX continues to increase. The risk-on sentiment could drive the price of gold down again after the current bounce back. Technically, the rebound was natural and somehow expected after an important drop, and due to the USD temporary depreciation.
Gold tries to get out from the minor up channel. Closing and stabilizing below the S1 (1,724) could indicate that the price may develop a sell-off. The pressure remains high as long as it stays under the median line (ML) and below the inside sliding line (SL).
I've told you in my previous analysis that a larger growth could be validated only if the price jumps and stabilizes above the median line (ML). XAU/USD could continue to increase within the up channel's body if it registers another false breakdown.
A bearish closure under 1,719 former low could represent a selling opportunity. Dropping and stabilizing under the S1 (1,724) should validate the up-channel breakdown.
1,676 lower low is seen as a downside target if XAU/USD starts declining again after the short-term rebound.
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