This week, the top event of them all is scheduled. On Wednesday, at 18:00 GMT, the US Federal Reserve is set to cut interest rates.
The market consensus is that the Fed will cut by 0.25%. However, some expect that the Fed might cut even 0.50%. In the case of the larger cut, the US Dollar would decline.
However, in most cases, there is more impact from the follow-up press conference than the rate announcement. The press conference of the Chairman of the US Federal Reserve Jerome Powell is scheduled for 18:30 GMT.
Prior to the Fed event, some volatility might be caused by a surprise in the US monthly Retail Sales data sets at 12:30 GMT.
After the Fed event, there are two more central bank events that might not only impact the underlying currencies, but also cause a spillover into other currency pairs. Namely, if the Bank of England causes a major surge of the Pound against the US Dollar, the selling of the USD will cause a surge of the EUR/USD.
The Bank of England is set to keep the Official Bank Rate at 5.00% on Thursday at 11:00 GMT. It is forecast that 2 of the 9 monetary policy committee members will vote for a rate cut, but 7 of 9 are set to vote for keeping rates unchanged.
On Friday, watch the Japanese Yen during the Asian session. The Bank of Japan is expected to announce its monetary policy. Despite the BoJ Policy Rate being forecast to remain unchanged, markets might move due to comments from the central bankers.
The BoJ does not give a predetermined time for its announcements, as it wants to avoid unnecessary speculation from market participants.
XAU/USD short-term forecast
A resumption of the surge is set to face the 2,590.00 level, before the price reaches the 2,600.00 mark, which is bound to act as strong resistance.
In regard to support, the 2,575.10/2,577.50 zone is set to be strengthened by the ascending 50-hour simple moving average. The SMA might push the rate up. Further below, note the lower trend line of a channel up pattern and the 2,570.00 and 2,560.00 levels.
XAU/USD daily charts review
On the daily candle chart, the metal found support in the 50 and 100-day simple moving averages, which have been the cause of the resumed surge of the price.Most recently, after a long period of consolidation, the metal has broken out of the consolidation rate to the upside.
Daily Candle Chart
Traders set up buy orders
On Thursday, 74% of volume was in short positions.
Meanwhile, in the 1000 point range around the latest price, the pending orders were 80% to buy the metal.
On Monday, traders were 72% short and orders were 64% to buy.