Gold has traded sideways during the last 24 hours, as its price has consolidated after the sharp drop that occurred since May 1.
Meanwhile, the rate still had no technical support as low as 1,263.70. The exception to this was the psychological support provided by the 1,270.00 level.
On Friday, the US Employment data sets will be published at 12:30 GMT. This event is considered the second most important release for the USD.
However, due to three data sets having individual impact on the USD the range of the volatility increase is wide during the data release.
Meanwhile, check out the previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
XAU/USD short-term forecast
During the previous trading session, the price for gold traded sideways between the Fibonacci 38.20% retracement and the lower boundary of the falling wedge pattern, located at 1,273.68 and 1,269.55 respectively.
Given that the XAU/USD exchange rate is pressured by the 55-, 100– and 200-hour SMAs, it is likely, that a breakout north from the pattern could occur. A possible downside target is the psychological level at 1,266.00.
However, if the given pattern holds, it is expected, that the rate could continue to trade sideways around the 1,272.00 level. It is unlikely, that some upside potential could prevail in the market due to the given resistance.
Hourly Chart
On the daily candle chart it is observed that the metal has failed to pass the resistance of the 1,290.00 level.Meanwhile, note that the monthly support level is gone, as a new month has started. The price has no support as low as the 1,263.70 level on the daily candle chart.
Daily Chart
Short sentiment remains intact
Throughout the week, on the Swiss Foreign Exchange, 64% of open position volume was in short positions.
Meanwhile, on Friday, the trader set up pending orders in the 1000-base point range around the metal's current price were no longer set to buy.
Namely, 56% of trade orders were to sell the metal.