Gold failed at its second attempt to pass the resistance of the monthly pivot point at 1.287.27.
The event was followed by a decline, which was stopped by the 200-hour simple moving average.
In regards to the near term future, another attempt at the resistance of the pivot point is expected.
This week there are three notable events on the economic calendar that traders will watch.
On Wednesday, the markets will watch the Bank of Canada Rate Statement at 14:00 GMT. This event has caused since October 2018 moves from 67 to 93 base points on the USD/CAD.
It is currently the top creator of sudden volatility in the markets.
On Thursday, at 12:30 GMT the US Preliminary GDP will be published. This event, which is considered and shown on the calendars as a top mover, has not caused notable moves.
Since November 2017 this event has caused on the EUR/USD moves from 6.8 to 11.9 pips during the five minutes after the release. Note that a move below ten pips on the EUR/USD during five minutes happen often without any data being published.
The week will end with the Canadian GDP publication at 12:30 GMT. This event has caused moves from 21 to 64 pips since December.
XAU/USD short-term forecast
On Monday, the XAU/USD exchange rate declined to the lower boundary of the short-term ascending channel at 1,282.75. During today's morning, the rate reversed north.
From a theoretical point of view, the price for gold should target the upper channel line at the 1,288.85 mark. In this case the rate has to surpass the resistance level—the monthly PP at 1,287.27.
However, note, that the exchange rate is pressured by the 55—hour SMA, currently located at 1,284.63. Thus, if the given channel does not hold, a breakout south could occur soon.
Hourly Chart
On the daily candle chart the recent low levels of May have provided the needed reference points to drawn an ascending channel pattern.In general, it is expected that this pattern guides the rate up until August.
However, the rate first needs to pass the strong resistance of the levels near the 1,290.00 mark.
Daily Chart
Short sentiment remains unchanged
The SWFX sentiment was 65% short since Friday.
Namely, 65% of open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 1000 base point range around the current price 53% of pending orders were set to sell the metal.