The Gold dropped after the yesterday’s impressive rally. Has touched a strong resistance level and failed once again to close above it. Technically is still expected to climb much higher in the upcoming period, even if we’ll have a minor decrease.

The yellow metal decreased also because the Aussie and Kiwi are losing significant ground versus the greenback. Most likely we’ll have a high volatility on Gold in the afternoon as the US will release the high impact data. Better US reports will boost the USD and the gold will drop much deeper in the upcoming days, but another disappointment will weaken the greenback and the yellow metal will shine again.

The AUD/USD and the NZD/USD have dropped significantly in the morning, the Kiwi was punished by the New Zealand Overseas Trade Index increased only by 1.5% less compared to the 3.2% estimate. On the other hand, the Aussie decreased significantly even if the AIG Manufacturing Index increased to 59.8 points, from 56.0  points, the Commodity Prices increased by 20.1%. The AUD ignored the Chinese Caixin Manufacturing PMI amazing increase, was reported at 51.6 points, higher versus the 50.9 estimate.

Price failed once again to close above the first warning line (WL1) of the major descending pitchfork, could retest the 150% Fibonacci line (ascending dotted line). Technically is somehow expected to increase further after the yesterday’s impressive rally.

Price increased sharply after the failure to close under the 1303 static support and after the failure to reach the 23.6% retracement. We had a false breakdown below the 150% line, so should climb much higher unless the United States data will impress later.

However, another breakdown below the 150% line, followed by a retest will signal a broader drop towards the first warning line (WL1) of the ascending pitchfork and towards the 38.2% retracement level. A USDX’s rally will send the gold towards the confluence area formed by the WL1 with the 50% level. The next upside target will be at the 1348 horizontal resistance.