Gold (XAU/USD) is trading back below the $1,900 psychological level after failing to take out a dynamic resistance and due to the USD's appreciation. The price could edge higher again if the US data will disappoint later today.
The US NFP indicator is expected around 60K jobs in December but I'm afraid that it could come in worse than expected as the ADP Non-Farm Employment Change has fallen into the negative territory on Wednesday.
XAU/USD Temporary Drop?
Gold failed to stabilize above the first warning line (WL1) of the descending pitchfork signaling exhausted buyers and a potential temporary retreat. Wednesday's bearish engulfing indicated a sell-off.
Now the rate has registered a false breakdown below the upper median line (UML) of the descending pitchfork and it could try to come back higher after the US economic data. The bullish bias is still intact despite the current drop as long it stays above the 1,862 - 1,848 area.
XAU/USD could reach the upper median line (UML) again, another false breakdown with great separation or a bullish engulfing could add a great long opportunity. Coming back and stabilizing above the $1,900 could represent a long opportunity as well.
Also, we'll have a buying opportunity if the price jumps and stabilizes above the warning line (WL1).
Selling is not an option right now, we had a short opportunity after Wednesday's bearish engulfing.