The yellow metal's price has made a sharp drop and an almost immediate recovery. The event was caused by a break out from the sideways trading that was stopped by the 100-day simple moving average.
The event signals that gold price is favouring a move down for the medium term future.
On Friday, at 12:30 GMT the US and Canadian employment data sets will be published. The US data is expected to impact all USD pairs.
Meanwhile, the Canadian data should cause a much bigger impact on all CAD pairs. Most complicated price movements will happen on the USD/CAD.
XAU/USD short term forecast
On Thursday, gold tested the lower boundary of the descending triangle pattern at 1,282.56.
Given that the price for gold is pressured by the 55– and 100-hour SMAs, it is likely that the XAU/USD exchange rate trades down and re-tests the lower pattern line.
If the given resistance does not hold, it is expected that the rate extends gains and reaches the psychological level at 1,294.00.
Hourly Chart
On the daily chart, it can be observed that the lower trend line of the hourly chart's triangle pattern was supported by the 100-day simple moving average, which on Friday had moved to 1,282.92.This support level could push the metal's price higher or be passed. Due to that reason it has to be watched.
Daily Chart
Traders continue to short the metal
Since Wednesday, 56% of the open position volume on the Swiss Foreign Exchange was in short positions.
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 60% of cases.