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XAUUSD Inverse Head and Shoulders on 1D for FX_IDC:XAUUSD by TradingShot

Yesterday’s sharp drop on Gold was fueled by the much better than expected Retail Sales, that pushed the USD higher and XAUUSD lower.

It may have taken many of us by surprise but from a technical perspective it has created a well know bullish reversal pattern, the Inverse Head and Shoulders (IH&S). As you see the 1W MA100 has also come to rescue (red trend-line), so we have to keep an eye for a closing above that level to sustain a rebound. That should be initially towards the 1834.50 Resistance/ neckline and if the pattern holds technically, it should break it.

A drop/ 1D candle closing below the Shoulders’ Support level invalidates the pattern and sets target for the 1677 – 1682 Support Zone which is so far a Triple Bottom (March 08, March 31 and August 09 lows).

Which scenario do you think is more likely?

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