On April 15th, I wrote about a fakeout from XAUUSD that could send it lower.
The breakdown from that August trend line has held, but gold hasn’t really done much since then either.
However, that might be about to change.
Gold is testing the March 21st trend line that has been incredibly significant for the last few weeks.
A sustained break below this level on the higher time frames would open up the confluence of support at $1,920.
But, as always, it’s imperative to wait for a confirmed breakdown.
For now, XAUUSD is holding above the trend line, so there is no confirmed short just yet.
Furthermore, don’t underestimate the significance of the $1,920 support area if we see gold test it in the coming days.
It’s the intersection of a key horizontal level and the November trend line.
Alternatively, a move higher and break above the $2,050 high would negate the bearish outlook.
And if we see XAUUSD break down from this March trend line and $1,920 support fails, we could see a much more significant correction toward $1,800.
