After holding for eight hours on Tuesday, the support of the ascending wedge pattern broke. This resulted first in trading above the 1,850.00 mark, and afterwards a decline.
By the middle of Wednesday's GMT trading hours, the commodity price had reached below the 1,845.00 level.
On Wednesday, January 27, the Federal Reserve is going to unveil its monetary policy plans by publishing the FOMC Statement at 19:00 GMT.
On Thursday, January 28, the US Advance GDP data is set to be released at 13:30 GMT. Also, the US Unemployment Claims data will be published at the same time.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
XAU/USD short-term forecast
It is likely that some downside potential could prevail in the market, as the yellow metal is pressured by the 55-, 100– and 200-hour SMAs, as well the Fibo 23.60% in the 1,851.20/1,860.59.
In the meantime, the metal has no technical support. The price could find support in round price levels like the 1,840.00, 1,835.00 and 1,830.00 levels.
Hourly Chart
On the daily candle chart, the metal has passed the support of the 200-day simple moving average, which had provided support during the first half of this week.
Technical support could be provided by the 38.20% Fibonacci retracement level at 1,837.43. However, note that it has never held for longer than one trading session.
Daily Candle Chart
Traders remain long on gold
Since Monday, the sentiment on the Swiss Foreign Exchange was bullish, as 58% of open position volume was long.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 73% to buy the metal.