Last week, the XAU/USD exchange rate revealed an ascending triangle pattern.
Yesterday, the rate re-tested the lower pattern line near 1,695.00. During Tuesday morning, the rate reversed north.
This week, monthly US inflation and retail sales data sets are bound to cause notable reactions, as they have done in the past. Namely, US CPI on Tuesday, US PPI on Wednesday and US Retail Sales on Friday are being released at 12:30 GMT.
XAU/USD short-term forecast
On Monday, the XAU/USD exchange rate re-tested the lower line of the ascending triangle pattern in the 1,695.00 area. During today's morning, the rate reversed north.
From a theoretical point of view, it is likely that some upside potential could continue to prevail in the market, and the rate could target the upper pattern line at 1,722.00.
However, note that yellow metal is pressured by the 55-hour SMA near 1,710.00. If the given resistance holds, it is likely that the rate could re-test the lower channel line. If the given pattern does not hold, the price for gold could decline to the 1,690.00 area.
Hourly Chart
On the daily candle chart, the metal is overbought, as its price is far above the daily simple moving averages. The most close by 55-day SMA was located at the 1,646.00 mark.
Daily Candle
Traders are long on gold
Since Friday, the Swiss Foreign Exchange sentiment has been 57% long.