The XAU/USD will probably make one more decline to complete a bearish ABC (orange) correction, which could complete a wave 2 (green) retracement. This remains valid as long as price is able to stay above the 100% Fibonacci level of wave 2 vs 1, because a break below invalidates (red x) the wave pattern. A bullish bounce at the Fibs and breakout above the resistance trend line (red) could confirm (green check) the bullish trend.
The XAU/USD showed strong bearish momentum which could indicate a wave 3 (dark red). If that is true, then the current pullback should remain shallow and not break above the 50% Fib retracement level of wave 4 vs 3 otherwise the current wave pattern is invalidated (red x). A bearish breakout confirms (green check) the wave 5 (dark red) continuation towards the Fibonacci levels of wave 2 vs 1.
