The squeeze of the yellow metal resulted first in a false breakout down, which was followed by a break out to the upside. Namely, the pair shortly traded below 1,905.00 before starting a surge, which reached above 1,955.00
On Thursday, the price had retreated and found support in the 1,940.00 level.
Economic Calendar Analysis
On Thursday, the US Preliminary GDP and the US Unemployment claims are set to be published. Due to these events usually not being released at the same time, the past reactions need to be combined.
Namely, in the case of the same direction surprise the volatility pips need to be added one to another. On the other hand, different results shown by each data set could cancel one another out.
Click on the link below to find out more about the data releases.
XAU/USD short-term forecast
The rate has found support in the 1,940.00 level and was set to test the resistance of the 1,950.00 level, which was strengthened by the 200-hour simple moving average. If the rate breaks these resistance levels, it would once again test the 1,960.00 level, which stopped its surge on Monday.
On the other hand, the metal might trade sideways until the support of the 55 and 100-hour simple moving averages push it higher.
Hourly Chart
On the daily candle chart, the price bounced off the lower trend line of the long term channel up pattern. From a technical perspective, the pattern was the cause of the Wednesday surge.
Daily Candle Chart
Long sentiment increases
On Thursday, on the Swiss Foreign Exchange the sentiment was long, as of total open position volume 57% was long.
The sentiment was 55% long on Wednesday.
Meanwhile, in the 1000-pip range around the metal's price the orders were 74% to buy.
Previously, orders were 57% to buy.