On Wednesday, the XAU/USD exchange rate reversed south from the upper boundary of the medium-term ascending channel at 1,484.50. During today’s morning, the rate was testing the support formed by the 55-hour SMA and the monthly PP at 1,475.51.
If the given support level holds, it is likely that a reversal north could occur in the nearest future. In this case, the exchange rate could re-test the upper channel line.
However, from a theoretical perspective, it is likely that some downside potential could continue to prevail in the market. But it is unlikely that the price for gold could drop lower than the 1,465.00 area due to the support cluster formed by the 100- and 200-hour SMAs, as well the Fibo 23.60%.
