The price of gold crashed today as the Dollar Index rallied. When the USD dominates the currency market, XAU/USD could drop. The metal was trading at 1,651 at the time of writing and it seems heavy despite the current rebound.
As you already know from my previous analyses, Gold maintains a bearish bias as the central banks are expected to continue hiking rates in their efforts to drag down inflation. Fundamentally, XAU/USD crashed after the German and Euro-zone Flash Manufacturing PMI and Flash Services PMI reported poor data signaling contraction.
Later, the US Flash Services PMI is expected at 45.5 points versus 43.7 in the previous reporting period, while Flash Manufacturing PMI could be reported at 51.0 points. Better than expected US data could boost the USD and could push Gold down.
XAU/USD Retested Resistance Levels!
As you can see on the H1 chart, XAU/USD escaped from the symmetrical triangle. You knew from my analysis posted yesterday that escaping from this pattern could bring us new opportunities.
The rate found support on the S1 (1,641) and now it has rebounded in the short term. After its massive drop, a minor rebound was natural. As long as it stays under 1,654 - 1,650, the bias is bearish.
Staying below the 1,654 - 1,659 resistance area and making a new lower low, dropping and closing below 1,641 activates more declines and brings short opportunities.