Gold passes important support line

Note: This section contains information in English only.
Source: Dukascopy Bank SA
As the US Dollar continues to strengthen, the price for gold has declined. The USD has been strengthening due to risk on sentiment increasing after tensions in the Middle East did not escalate. Meanwhile, the talk of rising inflation in the US has been continuing, as pressure increases on the US Federal Reserve to tighten policy.

Economic Calendar Analysis



At 13:45 GMT, all of financial markets could move due to the publication of the United States Manufacturing and Services sectors Purchasing Managers Indices.

On Thursday, watch the publication of the US Advance quarterly GDP publication at 12:30 GMT. Note that the United States GDP data is published over the span of a quarter by giving updated data each month. First release has the most impact and is called the Preliminary. It is followed by the Advance GDP release, which is expected on Thursday. Afterwards, the GDP publications end with the Final GDP, and the cycle starts again with a new quarter.

Also on Thursday, watch the US Pending Home Sales data publication at 14:00 GMT. In the recent months, this previously ignored data set has started to impact the US Dollar.

On Friday, one of the top US data releases will occur. The Core Personal Consumption Expenditure will reveal more detailed impact of inflation on the US consumer. US monetary policy makers have been observing this index instead of the Consumer Price Index to decide upon their policy.

XAU/USD short-term forecast

On Tuesday, the metal's price was already below 2,300.00. The ongoing decline could look for support in early April's support and resistance zones near 2,265.00 and 2,225.00.

On the other hand, a recovery of the metal would have to break the descending trend line that guides the price lower. Higher above, note the resistance of the 2,320.00, 2,340.00 and 2,360.00 levels.

Hourly Chart

XAU/USD daily charts review

We previously wrote: "On the daily candle chart, the metal shows to be massively overbought, as it has left far below the current price the daily simple moving averages. It needs to consolidate by trading sideways or declining, before resuming the broader surge."

The decline is occurring, as the metal has passed below the support line that connects the February and March low levels. The trend line was expected to keep the metal from declining. A potential target for the decline could be the 2,223.00 level and the ascending 50-day simple moving average.

Daily Candle Chart


Some traders close short

On Tuesday, 68% of Dukascopy traders were short, as that proportion of open position volume was in short positions.

In the meantime, pending orders in the 1000-pip range around the current price were 57% to buy the metal.

On Thursday, traders were 71% short, as some of the bears had closed their positions. Meanwhile, pending orders were 63% to buy.

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