Gold has reached a new low level. The commodity price has reached a support cluster near the 1,275.00 level.
The rate is expected to consolidate its recent gains and wait up for the resistance of the simple moving averages. The SMAs are expected to push the rate down.
On Wednesday, the UK Consumer Price Index will be released at 08:30 GMT. Afterwards, at 12:30 the Canadian CPI and Trade Balance will be released. This is expected to cause the biggest impact during this week.
The data flow will end on Thursday. The European Manufacturing PMIs will be released at 07:15 GMT and 07:30 GMT. Dukascopy Analytics will cover the 07:30 GMT, as at that time the German PMI will be published. The German data causes the biggest reaction on EUR pairs.
An hour later, at 08:30 GMT, the UK Retail Sales will be published.
Last but not least, the Canadian and US Retail Sales will be published at 12:30 GMT. Both data sets combined could cause a move on the USD/CAD of up to 30 pips.
Meanwhile, check out previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
XAU/USD short term forecast
During Tuesday's trading session, the XAU/USD exchange rate breached the descending triangle pattern south and reached the support level formed by a combination of the monthly S1 and the Fibo 38.20% at 1,274.13.
If the given support level holds, it is likely that the price for the gold reverses north and tries to surpass the resistance cluster formed by the 55-, 100– and 200-hour SMAs in the 1,283.16/1,293.85 range.
Otherwise, it is expected, that the rate continues to trade down. In this case, the price for gold could reach the psychological level at 1,270.00.
Hourly Chart
On the daily chart the exchange rate has no technical resistance as low as the 200-day simple moving average near 1,250.00Previously the commodity price reached below the 100-day SMA.
Daily Chart
Short sentiment increases
Traders continue to short gold. Since Monday, on the Swiss Foreign Exchange 61% of the total open position volume was in short positions.
On Wednesday, the sentiment increased, as 64% of open position volume was short.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price reveal additional information.
On Tuesday, trader pending orders in that range were set to buy in 68% of cases.
By the middle of Wednesday's trading session the orders were neutral, as 52% of pending orders were to sell.