The yellow metal has shown the first exhaustion signs on the short term after the last impulsive movement. Price has decreased a little as the USD was boosted by the USDX’s rally. Technically, the Gold it is still somehow expected to drop again after the temporary rebound.

This scenario will take shape only if the USDX will resume the minor bullish momentum. Gold has come back and has retested a broken dynamic support after the impressive sell-off, but it has failed to reach other two very important and strong dynamic resistance lines.

You can see that the rate has dropped after the WL1 retest, so technically it is somehow expected to drop towards the median line (ml) of the descending pitchfork again. It has failed to reach the 50% Fibonacci line of the black ascending pitchfork and the 50% Fibonacci line of the descending pitchfork.

Maybe the rate will try once again to reach the first warning line (WL1) and the 50% lines, but you should know that another failure to reach them or a false breakdown will give us a great chance to go short again on Gold.

Personally, I believe that only a valid breakout above the downside 50% Fibonacci line of the black ascending pitchfork it will confirm and will announce a further and a broader upside movement. Price could move somehow sideways in the upcoming period, so you should stay away and wait for a fresh trading signal.

Right now is premature to say what could happen, that’s why we need a confirmation that the price will resume the downside movement. Maybe we’ll have a significant rebound only if the rate will come back down and if it will make a false breakdown below the lower median line (lml) of the ascending pitchfork or if it will fail to reach and retest it.