Gold's surge above the 1,290.00 level failed on Wednesday. The metal dropped back down to the 1,280.00 level as soon as the failure occurred.
However, the drop was stopped by the hourly chart's simple moving averages, which had pushed the rate up on Thursday.
On Thursday, the usual data starts. At 12:30 GMT the Canadian Trade Balance and the US Producers Price Index will be released. These events can cause a move from five to eighty pips. The range is explained in the weekly Economic Calendar Overview video.
On Friday, there will be two times to watch the calendar.
At 08:30 GMT the UK GDP and Manufacturing Production will be published. This event can cause a move of fifteen to twenty pips.
At 12:30 GMT the Canadian Employment data will cause a move of about forty pips. At the same time the US Consumer Price Index release should cause a move of up to twenty pips. Combined they can have various impacts on the Forex market.
Watch this week's economic calendar analysis and leave comments with questions about the specifics.
XAU/USD short-term forecast
Yesterday, the XAU/USD exchange rate dropped to the lower boundary of the short-term ascending channel at 1,280.00. During today's morning, the rate reversed north.
Given that gold is supported by the 55-, 100– and 200-hour SMAs, currently located in the 1,280.75/1,283.85 range, it is likely, that bulls could prevail in the market. However, the rate has to surpass the monthly PP at 1,287.27.
If the given resistance level holds, it is expected, that the price for gold could trade sideways around the psychological level at the 1,285.00 mark.
Hourly Chart
On the daily candle chart the commodity price has once more approached the resistance of the 1,290.00 level. Currently the daily SMAs are no longer strengthening this level.The 100-hour SMA has moved up to the 1,295.70 level, and the 55-day simple moving average was approaching it from the above at 1,296.90
Daily Chart
Traders shorted the decline
Since Wednesday, the situation changed. 64% of open position volume was in short positions.
Meanwhile, in the 1000 base point range around the current price 61% of pending orders were set to sell the metal.
Traders shorted the recent decline down from the 1,290.00 level.