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Gold crashed today and now is trading at 1,819 at the time of writing. It has dropped as much as 1,815 today where it has found temporary support and demand. XAU/USD registered a 1.94% drop from today's high of 1,851 to the daily low of 1,815.
DXY's strong rally forced the yellow metal to develop a broader drop. Still, after its massive drop, we cannot exclude temporary rebounds as the rate could come back to test and retest the immediate resistance levels before resuming its sell-off. You knew from my analyses that the RBA and Fed Chair Powell's Testimony could move the price today. Powell confirmed further rate hikes, while the RBA delivered a 25 bps hike as expected.
Tomorrow, the BOC, the US ADP Non-Farm Employment Change, JOLTS Job Openings, and Fed Chair Powell's keynote speech should bring fresh sharp movements. Positive US data during the week should boost the greenback and could send XAU/USD towards new lows.
As you can see on the H1 chart, XAU/USD ignored the weekly pivot point of 1,838, the median line (ml), and the S1 (1,821). These represented downside obstacles. Now, it tries to come back to retest the broken levels.
After its strong sell-off, a rebound is natural. Still, the downside pressure remains high. The bounce back could bring us new short opportunities.
As long as it stays under the median line (ml), XAU/USD could extend its downside movement as the bias remains bearish. Testing and retesting the median line (ml), registering only false breakouts should bring us new selling opportunities.
Still, a new lower low, a bearish closure below 1,815 is seen as a fresh short opportunity. This scenario activates more declines.
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