Gold has plummeted and quickly reached the previously set target at 1,295.00. The move has actually happened too fast.
Due to that reason it is expected that the metal will consolidate and trade sideways before continuing.
On Friday, there will be two releases. First will be the UK Current Account publication at 09:30 GMT. This event is expected to cause a small reaction because still most attention of fundamental traders is on the Brexit events not macroeconomic data.
That is because no historical data can be used for forecasting a currency strength in a situation where the base of the underlying economy is about to change so drastically.
Afterwards, on the same day, the top release of the week will occur. At 12:30 GMT the Canadian GDP will be published. The Canadian events are the only ones, which have constantly created exchange rate adjustments of more than 40 pips.
For more information watch the week's calendar review on YouTube by clicking the link below.
XAU/USD short term forecast
Gold has fallen below the technical levels above the 1,290.00 level. It has no technical support as low as 1,276.65.
In general the metal should decline down. However, it has already dropped. Due to that reason the metal's price is expected first to consolidate or even slightly surge upwards.
Hourly Chart
On the daily chart, the commodity price had reached below the lower trend line of a long term ascending channel pattern.Meanwhile, note that the rate has additional support on the daily chart. Namely, the 100-day SMA was providing support near 1,280.00.
Daily Chart
Traders continue to short the metal
Since Monday, 57% of the open position volume on the Swiss Foreign Exchange remained short.
On Friday, the short sentiment had decreased only by one percent. Most traders continued to short the metal after the drop.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price reveal additional information.
Namely, trader pending orders in that range were set to buy in 67% of cases. Most likely those are stop losses, take profits and order ready to open long positions, if a retracement starts.