Gold rallied today and has managed to recover after the last day’s significant drop. However, the current rebound could be only temporary because the AUD/USD and the NZD/USD may resume the bearish movements.
It remains to see if the retreat is completed and if the bulls could take full control again. Price rebounded only because the USDX has decreased a little today. I’ve said in the last week that is premature to talk about a USDX’s larger rebound at this moment because it is still trapped below some important resistance levels.
USDX could come much deeper to test and retest a dynamic support (resistance turned into support), a drop below the 90.00 psychological level will send the greenback lower versus its rivals and the yellow metal higher.
Gold increased also because the Aussie increased versus the greenback and resumed the Friday’s bullish candle. The Aussie was supported by the Chinese data today, the New Loans increase from 584B to 2900B, beating the 2050B estimate, while the M2 Money Supply rose by 8.6%, more versus the 8.2% compared to the 8.2% growth in the former reading period. The RBA Assist Gov Ellis will speak later, but I don’t believe that will have a significant impact.
Price has found strong support right above the second sliding line (sl2) of the ascending pitchfork, but the upside momentum was paused by the first warning line (wl1).
A false breakout above the upper median line (UML) of the descending pitchfork could signal a further drop on the Daily chart. Price could climb much higher on the short term, but personally, I still believe that we could have a larger drop, so a further increase will give us the chance to go short again on the yellow metal. The corrective phase was expected after the false breakout above the 1357 static resistance.