On Monday, the metal broke a resistance line of a large scale pattern and surged above the 1,325.00 level.
This event signals that the commodity price will continue to surge higher. However, simple moving averages indicate that the recent surge has brought the metal into the overbought zone.
This week will have various data releases in various countries that will influence many currency exchange rates. Although, the main event of the week will be the release of the Federal Open Markets Committee Meeting Minutes on Wednesday.
The data releases will start on Tuesday. At 09:30 GMT the UK will publish their employment data. The Average Earnings index will have the biggest impact on the value of GBP.
On Wednesday, the already mentioned FOMC Meeting Minutes will be published at 19:00 GMT. They are expected to cause an impact on all USD pairs.
On Thursday, EUR traders will pay attention to the Markit released European Services and Manufacturing PMIs. The German release at 08:30 GMT is the most important.
Later on during the same day the US Durable Goods Orders and Core Durable Goods Orders will be published.
The week will end with the Canadian Core Retail Sales at 13:30 GMT on Friday.
All of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more information watch the weekly Calendar Analysis stream recording.
XAU/USD short term forecast
During Friday's trading session, the yellow metal has been appreciating against the US Dollar to end the trading day at 1,321.12. On Monday morning, the gold was located at the 1,323.56 mark.
In regards to the near-term future, most likely, the yellow metal will continue appreciating against the US Dollar to break the dominant pattern line at 1,326.22.
On the other hand, the dominant pattern line could resist the rate to trade at the 1,310.00 level.
Hourly Chart
A new pattern has been added to the daily chart and old patterns were deleted. Note that it is a simple ascending channel pattern, which captures the surge of the yellow metal that has been occurring since November.If the pattern manages to guide the commodity price higher, by the start of April, the commodity price should trade above the 1,350.00 level. Although, on its way upwards the metal will face various monthly pivot points.
Meanwhile, all simple moving daily averages are far below the metal, indicating that it is overbought.
Daily Chart
Short sentiment remains intact
The total volume of open positions on the Swiss Foreign Exchange indicates that traders are shorting gold. Namely, 64% of open volume is short.
Most likely traders are expecting a consolidating decline in the aftermath of the recent surge.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price indicate that buying can be expected. Namely, 55% of all orders in that range were set to buy.