Gold has surged, as expected. It got pushed up by the support of the hourly charts simple moving averages.
On Wednesday, the surge had already reached above the 1,290.00 level.
This week all the action on the US Dollar from a fundamental side will be in the second half of the week. Meanwhile, there are large events to watch prior to that.
On Thursday, the usual data starts. At 12:30 GMT the Canadian Trade Balance and the US Producers Price Index will be released. These events can cause a move from five to eighty pips. The range is explained in the weekly Economic Calendar Overview video.
On Friday, there will be two times to watch the calendar.
At 08:30 GMT the UK GDP and Manufacturing Production will be published. This event can cause a move of fifteen to twenty pips.
At 12:30 GMT the Canadian Employment data will cause a move of about forty pips. At the same time the US Consumer Price Index release should cause a move of up to twenty pips. Combined they can have various impacts on the Forex market.
Watch this week's economic calendar analysis and leave comments with questions about the specifics.
XAU/USD short-term forecast
On Wednesday, gold surged. It was set to reach the 1,292.00 level. Moreover, if the 1,292.00 level is broken, the commodity price should reach up to the 1,300.00 mark.
Namely, the metal had passed the resistance of a monthly pivot point at 1,287.27 and was bound to reach an upper trend line of a large scale descending pattern near 1,292.00.
On the other hand the price had overextended its gains. It could consolidate by trading sideways or retreating back down to the monthly pivot point.
Hourly Chart
On the daily candle chart the commodity price has once more approached the resistance of the 1,290.00 level. Currently the daily SMAs are no longer strengthening this level.The 100-hour SMA has moved up to the 1,295.70 level, and the 55-day simple moving average was approaching it from the above at 1,296.90
Daily Chart
Short sentiment increases
Since Monday, 62% of trader open position volume was in short positions.
On Wednesday, the situation changed. 64% of open position volume was in short positions.
It could have changed due to both additional shorts positions being opened and long positions being closed.
Meanwhile, in the 1000 base point range around the current price 59% of pending orders were set to sell the metal.
In general, traders were waiting for a move down.