XAU/USD Analysis: Ready to test strength of dominant pattern

In essence, the buck is actively appreciating against the gold the third day in a row. A short-term bullish movement towards the 38.2% Fibonacci retracement level at 1,268.00 was the only exception and was attributed to beginning of drills on the Korean peninsula. But, in general, the pair is driven by optimism over the progress of tax bill. Accordingly, today the rate is expected to continue heading downwards until it makes a rebound from the bottom boundary of a currently active two-month long descending channel near 1,255.00. However, the above market sentiment has a good chance to push the rate even more down. If this breakout happens and the pair gains a foothold below the weekly S2, this might be a sign of existence of another unconfirmed four-month long descending channel.

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