On the daily chart below, we can see that after benefiting from a record high of 2076, gold has started to decline as better-than-expected economic data lifted Treasury yields and supported the US dollar. Yesterday, the price broke a major trend line which is the basis of the expanding wedge pattern.
We should now see the price drop towards the 1930 level where we can also find the 50% Fibonacci retracement level and the main trend line. The support area is expected to be really strong and buyers are likely to pile in there with specific risks below the trend line. On the other hand, sellers will want to see the price break below the support area before building up with more force and extending the sell towards the 1800 level.
On the 4-hour chart below, we can see the breakout that occurred yesterday after the US Retail Sales data came out better than expected. Obviously the sellers are in control now and blocking any negative news like the huge unemployment claims fiasco tomorrow or Fed Chair Powell being dovish on Friday, gold should continue lower towards the 1930 level.
On the hourly chart below, we can closely see the recent price action. Sellers should continue piling on the breakout of the swing low at 1985. If the breakout fails, then a potential pullback should head towards the 2000 resistance where we can also find the 38.2% Fibonacci retracement level. Sellers will wait there with specific risks above the resistance area and 1930 as a target. On the other hand, buyers will need to break above the trend line to regain some control and target 2076 high.
