Gold has been consolidating against the US Dollar since the second half of Tuesday.
The XAU/USD exchange rate could gain support from the 55- and 200-hour moving averages and trade upwards in the short term.
Fed Rate Cut
The Federal Open Market Committee cut the Federal Funds Rate to a target range of 1.00% to 1.25% at an unscheduled emergency meeting.
The US policymakers announced the cut of the interest rate by a half of a percentage point in response to the increasing economic threat from the coronavirus outbreak.
Economic Calendar Analysis
On Friday, the US employment data will be released at 13:30 GMT.
This event consists of three data sets – the Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.
Meanwhile, the week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
XAU/USD short-term forecast
On Wednesday, the XAU/USD exchange rate consolidated in the 1,640.00 area. During today's morning, the rate maintained its consolidation.
It is likely that yellow metal could gain support from the 55– and 200-hour SMAs near 1,635.00 and appreciate against the US Dollar in the short term. Note that the rate could face the resistance level—the monthly R1 at 1,668.23.
However, if the rate fails to surpass the 1,650.00 level, it is likely that gold could continue to consolidate against the Greenback. Also, it is unlikely that bears could prevail, and the rate could decline below the monthly PP at 1,607.96.
Hourly Chart
On the daily candle chart, the pierced channel up pattern continues to hold. The lower trend line of the pattern was pierced on Friday. However, the rate returned to trade in its borders.
In addition, during the recent decline, the rate was influenced by the support of the 55-day simple moving average, which has caught up to the price.
Daily Chart
Traders are short on gold
On Thursday, the Swiss Foreign Exchange gold sentiment was 57% short.
Meanwhile, in the 1000 base point range around the current metal's price the pending orders were to buy– 85% of orders were to buy and 15% to sell.