The US Federal Reserve Rate Announcement on Tuesday caused a jump of the yellow metal's price to the 1,650.00 mark.
On Wednesday, the metal had bounced off the 1,650.00 level and had found support in the 200-hour simple moving average near 1,635.00.
Fed Rate Cut
The Federal Open Market Committee cut the Federal Funds Rate to a target range of 1.00% to 1.25% at an unscheduled emergency meeting.
The US policymakers announced the cut of the interest rate by a half of a percentage point in response to the increasing economic threat from the coronavirus outbreak.
Economic Calendar Analysis
Some might consider watching the ADP Non-Farm Employment Change on Wednesday at 13:15 GMT.
On Wednesday, at 15:00 GMT the US ISM Non-Manufacturing PMI is set to be published.
On Friday, the US employment data will be released at 13:30 GMT.
This event consists of three data sets – the Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.
Meanwhile, the week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
XAU/USD short-term forecast
It is likely that yellow metal could gain support from the 200-hour moving average near 1,634.00, and continue to appreciate against the Greenback. A possible upside target is the monthly R1 at 1,668.23.
On the other hand, the exchange rate could consolidate in the 1,650.00 area in the short term. Also, it is unlikely that bears could prevail in the market, and the rate could decline below the monthly PP at 1,607.96.
Hourly Chart
On the daily candle chart, the pierced channel up pattern continues to hold. The lower trend line of the pattern was pierced on Friday. However, the rate returned to trade in its borders.
In addition, during the recent decline, the rate was influenced by the support of the 55-day simple moving average, which has caught up to the price.
Daily Chart
Traders are short on gold
Since the middle of Tuesday's GMT trading hours, the Swiss Foreign Exchange gold sentiment has been 58% short. Namely, 58% of open position volume was in short positions.
Meanwhile, in the 1000 base point range around the current metal's price the pending orders were to buy– 89% of orders were to buy and 11% to sell.
Previously, the orders were 50% to buy and 50% to sell.