On Wednesday, various exchange rates could react to the publication of the Markit Services and Manufacturing Purchasing Managers Indices. They are called indices, but in fact are survey results. Managers of a sector are surveyed about their expectations of the future in the sector.
In general a reading above 50 is seen as positive and a reading below 50 means bad expectations. However, the market does not care for the reading. What matters is the difference from the market consensus forecast. If the released reading is below or above expectations and there is a major difference, it shows that the market was wrong. Such data is followed by an adjustment in the underlying currency's value.
On Thursday, the US Advance GDP might impact the markets via an adjustment of the value of the US Dollar. Better GDP means that the US does not need to cut rates, which would keep the Dollar higher. Bad GDP data indicates that the Fed can cut, which would reduce the value of the USD.
On Friday, at 12:30 GMT, the top event of the week will take place. The US Core PCE Price Index will move the markets. The Core Personal Consumption Expenditure Index is expected to impact the markets by revealing whether inflation has increased or continues to decline. In general, the markets expect a reading of a monthly price increase of 0.2%. If the number is higher, the Dollar should surge. A reading below +0.2% is set to cause a decline of the USD.
XAU/USD short-term forecast
In the near term future, the price is set to look for support in the 2,390.00 level. If the metal moves below this level, the 2,370.00 level might slow down the decline, before gold reaches the 2,350.00 mark and the lower trend line of the channel down pattern.
On the other hand, a recovery of the commodity price would have to break the upper trend line of the channel pattern and the 2,400.00 mark. Higher above, take into account the combination of the 50 and 200-hour simple moving averages near 2,420.00. If these levels fail, the 2,450.00 level and the 100-hour simple moving average might impact the price.
XAU/USD daily charts review
The price has retreated to the support and resistance range at 2,390.00/2,430.00.A move below the support range could result in a decline to the 2,350.00 level, which is strengthened by the 50 and 100-day simple moving averages.
On the other hand a bounce off from the zone would confirm that it is still capable of keeping the metal's price up and new all-time-highs are possible.
Daily Candle Chart
Traders are short with buy orders
Since last week, 75% of traders were short, as they expected a further decline.
However, last week, pending orders for gold in the 1000 point range around current price were 83% to sell. This week, traders had set up to buy and close short positions, as 78% of orders were to buy.