The gold price slipped today as the US dollar dominated the currency market. XAU/USD is trading at $1,946 at the time of writing. Still, after its massive sell-off, the price could try to recover.

Yesterday, the Chinese, Japanese, and Eurozone data came in mixed, while the US Chicago PMI was reported at 42.8 points versus 43.3 points estimated.

Today, the Reserve Bank of Australia maintained the Cash Rate at 4.10% even if the traders expected a 25-bps hike. The Eurozone Unemployment Rate and German Unemployment Change came in better than expected, while German Final Manufacturing PMI and Eurozone Final Manufacturing PMI came in line with expectations.

Still, only the US economic data could really shake the price. JOLTS Job Openings indicator is expected at 9.61M versus 9.82M in the previous reporting period, ISM Manufacturing PMI could jump from 46.0 to 46.9 points, while Construction Spending may report a 0.6% growth.

In addition, the ISM Manufacturing Prices and Wards Total Vehicle Sales data will be released as well. Tomorrow, the ADP Non-Farm Employment Change is considered the most important event.

Gold Price Technical Analysis: Bearish Formation

(Click on image to enlarge)

Gold price hourly chart

Technically, the XAU/USD failed to reach the upper median line (uml) of the descending pitchfork, which stands as a dynamic resistance, signaling exhausted buyers.

It has failed to stay above the channel’s upside line, and now it challenges the uptrend line again. As you can see on the hourly chart, the price developed a flag pattern. This could result in a deeper drop, but it’s far from being confirmed.

As long as it stays above the uptrend line, the price could try to come back higher after its strong sell-off. Only a valid breakdown below the uptrend line activates more declines. The $1,945 represents a strong downside target if the rate extends its fall.

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