The price of GOLD (XAU/USD) experienced significant selling pressure after a brief rebound to around $1,946.70 during the Asian session. It has extended its downward movement, reaching near $1,940.00, as the US Dollar Index (DXY) recovered its losses and aimed for a new daily high above 104.34.

Investors are growing concerned about potential volatility in Tuesday’s trading session, leading to cautious market sentiment. There are expectations of another interest rate hike from the Federal Reserve (Fed), causing a slight retreat in S&P500 futures gains.

Fed Chair Jerome Powell mentioned that tight credit conditions imposed by US regional banks are effectively managing liquidity distribution, resulting in reduced economic activity. However, recent data indicates a surge in consumer spending and a labor market that hasn’t improved as anticipated, compelling the Fed to continue with its tightening policy.

This week, the focus will be on the release of US employment data, which will provide further insight into interest rate guidance. The upcoming Automatic Data Processing (ADP) Employment Change report on Thursday is expected to show a decrease to 170,000 from the previous release of 296,000.

From a technical perspective, GOLD prices closed below the $1,945.20 level, indicating a continuation of the expected bearish trend. The next target is set at $1,913.15. For the decline to continue, the price needs to break below the bullish channel’s support line at $1,939.90. Consolidation above this level could initiate a new bullish wave, potentially resuming the main upward trend.

Overall, the negative scenario remains intact as long as the price remains below the $1,961.30 and $1,977.25 levels.

A breakthrough above these levels would halt the bearish correction and redirect the price back to the main bullish trajectory.

The expected trading range for today is between $1,925.00 support and $1,960.00 resistance.