There are two noteworthy things to highlight in the intro about the yellow metal's price.
The decline caused by the passing of the support of the hourly simple moving averages has occurred. It had ended during the early hours of Thursday's trading and a surge began.
The surge was caused by a long term support line. In addition, the larger scale patterns have been updated.
As it is accustomed, the last week of the month is set to be quiet for fundamental macroeconomic data releases.
On Thursday the US Advance GDP will be released at 13:30 GMT. This event can cause moves of around 20 base points.
On Friday, the Canadian GDP data will be out at 13:30 GMT. It is most likely set to be the event which will cause the biggest move during this week.
For more information watch the weekly calendar analysis stream on our YouTube channel.
XAU/USD short term forecast
On Thursday the charts of the yellow metal were reviewed and trend lines were added. Meanwhile, the rate had finally properly declined below the resistance of the hourly simple moving averages.
Zoom out to see that the metal is trading in a rare large scale ascending wedge pattern. The rate's surge during the morning hours of Thursday. The surge was set to meet with the resistance of the 55 and 100-hour SMAs, which pushed the rate lower on Wednesday.
Watch the meeting of the technical levels and the rate. It will either result in another test of the supporting trend line or a surge to the 200-hour SMA at 1,330.00.
Meanwhile, note that to properly see the trend lines one has to load the previous price information and candles. Initially seeing the interactive chart, the trend lines might be shifted downwards.
Hourly Chart
On the daily chart the ascending wedge pattern can be seen much better. It can be seen that the support of the wedge began to work on Thursday.Meanwhile, note that the monthly R1 at 1,340.10 is about to disappear. Namely, tomorrow a new month starts and new pivot points will be calculated.
Daily Chart
Traders ride the downwards move
Traders have been largely shorting the metal throughout last week. This week, the situation had not changed.
Since the middle of Tuesday's trading 65% of the total open position volume on the Swiss Foreign Exchange was short.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price reveal additional information.
Namely, trader pending orders were mostly set to buy the commodity, as 62% of orders were set to buy.
The buy orders might be the take profits and stop losses of the short positions.