On Thursday, the yellow metals price was successful on its third attempt to pass the resistance of the 1,600.00 level. By the middle of Friday's GMT trading hours, the rate had reached the 1,620.00 level.
In the future, the pair was expected to use the support of the hourly simple moving averages to reach for the 1,640.00 level, which was slowing down price increases in March.
As it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggest to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
XAU/USD short-term forecast
It is likely that yellow metal could gain support from the 55-, 100– and 200-hour SMAs and appreciate against the Greenback in the short term. Note that the rate would have to surpass the local resistance level at 1,640.00.
If the given resistance level holds, it is likely that gold could trade sideways against the US Dollar in the nearest future.
Also, it is unlikely that bears could prevail in the market, and the price for gold could drop below the monthly PP at 1,577.89.
Hourly Chart
On the daily candle chart, the metal's price has retraced back to the 55-day simple moving average, which was located at 1,589.04. By doing this, the metal has removed some of the overbought pressure, which was present at the end of March. Namely, it can now surge higher more easily.
Daily Chart
Sentiment remains unchanged
Since last Monday, the Swiss Foreign Exchange sentiment was 55% long. Namely, 55% of open gold position volume was in long positions.
Traders remained slightly long on the metal despite the recently experienced decline.