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Gold (XAU/USD) Price Top and Trendline Breakdown

After the FOMC provided an optimistic view on the economy and maintained course to raise rates mid-year, the USD started to climb mostly across the board. It was not apparent first, but gold (xau/usd) was dragged down eventually during the 1/29 European session.

Gold (XAU/USD) 4H Chart 1/29
(click to enlarge)

The 4H chart shows the uptrend during 2015 stalling at 1307. Here it consolidated ahead of the FOMC meeting, and eventually headed lower afterwards. Price has completed the topping action and broke below the 1270-72 support area. It is now poised to test the 1254/55 area, which is where the 38.2% retracement and a previous resistance pivot resides.

If there is a pullback, watch out for resistance in the 1280-1290 area. If this area holds, there is further downside towards the 1235-1240 area, which involves the 50% retracement (1237.70), and a previous resistance pivot around 1240.

We should probably limit the current bearish outlook to the 1220 area, which is near the 61.8% retracement level.