FX.co ★ Gold Downside Invalidated, Buying Opportunity Incoming!

Gold increased after being rejected by a support zone. Its false breakdown with great separation through the immediate downside obstacles indicates potential growth. DXY's decline helped the yellow metal buyers to take the lead.

The FOMC could shake the markets on Wednesday as the traders are expecting some action in the upcoming monetary policy meetings. The price of Gold could jump higher if the risk-off sentiment dominates the markets in the upcoming period. Technically, XAU/USD registered a temporary decline as expected, so it could resume its growth.

XAU/USD Upside Breakout Favored!

Gold decreased after reaching the ascending pitchfork's upper median line (uml). Now it has found support above the lower median line (lml). The false breakdown with great separation indicates an upside momentum.

The immediate resistance is represented by the downtrend line. Jumping and stabilizing above it may signal further growth. The bias is bullish as long as it stays within the ascending pitchfork's body.

Outlook!

The false breakdown with great separation (dropping and closing far above) below the lower median line (lml) and through the 50% retracement level represented a buying opportunity.

Making a valid breakout through the minor downtrend line could bring a new buying opportunity. The upside scenario is valid as long as XAU/USD stays above the lower median line (lml).