the XAU/USD (Gold) has broken the support trend line (blue) of the uptrend channel. Does this indicate a bearish reversal or is it simply a mild retracement before the bulls regain control?
The XAU/USD is most likely just building a pullback within the uptrend as a wave 4 (blue) pattern. The Fibonacci 38.2%-50% retracement levels of wave 4 vs 3 will probably hold as support for a bullish bounce and uptrend continuation. This would only change if price is able to break below the 50% Fib, which makes a bearish reversal possible. A bullish breakout above the resistance trend line (red) could confirm the uptrend.
The XAU/USD is building a bearish ABC (green) zigzag pattern within the wave 4 (blue) correction. The current bullish push higher could be a wave bullish wave 4 (orange) of the larger wave C (green) as long as price stays below the resistance levels (red box). The next lower low should find support at the Fibs of wave4, unless price breaks below the 50% Fib or above the resistance box (red).
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Good trading, Chris Svorcik