On Wednesday, the yellow metal's price tested the resistance of the 1,863.00 level, which has been keeping the price down throughout this week. The test resulted in a decline to the support of the 55-hour SMA, which was expected to push the rate up to once again make an attempt to pass the 1,863.00 mark.
During the week there will be minor data sets published, which could cause initial reactions. Traders with close by tight stop losses should take into account the times of the macroeconomic data releases.
On Wednesday, the United States Bureau of Labor Statistics is set to publish the Consumer Price Index and Core Price Index at 13:30 GMT.
Afterwards, at 13:30 GMT, expect the weekly US Unemployment Claims.
The week will end with the publication of the US Retail Sales and US Core Retail Sales at 13:30 GMT. In November and December, these data sets caused an increase of volatility above the average.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
XAU/USD short-term forecast
From the one hand, it is likely that yellow metal could be pushed down by the 100-hour moving average near 1,870.00. In this case the exchange rate could decline below the 1,820.00 level.
From the other hand, yellow metal could gain support from the 55-hour moving average near 1,850.30. In this case the price for gold could try to exceed the 200-hour SMA near 1,898.00.
Hourly Chart
On the daily candle chart, the metal's decline passed the support of the 55-day SMA and pierced the 200-day simple moving average. Moreover, the 38.20% Fibonacci retracement level at 1,837.43 was passed on Friday and Monday. Due to that reason it is not expected that these levels would hold.
The metal has no additional technical support on the daily candle chart, as low as the 50.00% Fibo at 1,763.74. This level provided the price with support at the end of November, when the December surge started.
Daily Candle Chart
Traders remain long
On Wednesday, the sentiment on the Swiss Foreign Exchange was 55% bullish, as 55% of open position volume was long.
On Tuesday, 57% of open position volume was long.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 79% to buy the metal.
Previously, the orders were 85% to buy. The close by orders could be the stop losses of the long positions and open to go long positions.