03.02.202222:46 Forex Analysis & Reviews: Gold false breakdown with great separation through 1,800

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Gold was trading in the green at the 1,805.14 level far above the 1,788.68 today's low. The yellow metal has managed to stay above the 1,800 psychological level as the Dollar Index accelerated its drop.

XAU/USD erased some of today's losses despite the fact that the US ISM Services PMI was reported at 59.9 points versus 59.5 expected, while the Unemployment Claims dropped unexpectedly lower from 261K to 238K in the previous week below 245K expected.

Tomorrow, the US is to release the Non-Farm Payrolls, the Unemployment Rate, and the Average Hourly Earnings. These are seen as high-impact events and could bring sharp movements.

XAU/USD downside seems limited

Gold is struggling to stay higher and to resume its growth. As you can see on the H4 chart, it has registered only a false breakdown with great separation below 1,800, signaling that the bulls are still strong.

The 150% Fibonacci line and the weekly pivot point of 1,808.56 represent immediate upside obstacles. A valid breakout above these levels may announce potential upside continuation.

XAU/USD outlook

The previous H4 candle indicates strong upside pressure. Still, I believe that only a valid breakout above 1,811.02, a new higher high could really activate potential growth towards 1,831 and could bring new buying opportunities.

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