Late on Tuesday, the metal's price found resistance in the 1,740.00 mark and began a decline. During early hours of US trading, the metal had almost reached the support of the 1,700.00 mark.
It was expected that this level could provide support and stop the decline.
On Wednesday, the US ADP Non-Farm Employment Change at 13:15 GMT will be on the headlines.
On the same day, at 15:00 GMT the US ISM Non-Manufacturing PMI could cause a move.
On Friday, at 13:30 GMT the US will publish its monthly employment data. The release will consist of the Average Hourly Earnings, Non-farm Employment Change and Unemployment Rate.
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
The yellow metal's recovery found resistance in the 1,740.00 level. Meanwhile, the price almost ignored the 55-hour simple moving average and the 38.20% Fibonacci retracement level. Namely, round price levels managed to provide more impact than technical indicators.
In the meantime, the recent low levels were used to draw a channel down pattern, which has guided the metal since early February. In theory, the price should aim at the resistance of the pattern. However, it has already tested the lower trend line of the pattern twice.
In the near term future, the price could be pushed down by the 100-hour simple moving average, which was approaching the price from above. A decline could test the support of the the 1,700.00 mark.
On the other hand, a failure to push the price down by the 100- hour SMA could result in a surge to the upper trend line of the channel down pattern and the 200-hour SMA.
Hourly Chart
On the daily candle chart, the pair has reached the support of the large scale channel down pattern, which captures the metal's decline since the start of August.
In the case of the pattern's trend line holding, the price should retrace back up to the 1,763.74 level where a 50.00% Fibonacci retracement level was located at.
On the other hand, if the trend line fails to hold, the currency exchange rate could reach the 61.80% Fibo at 1,690.05.
Daily Candle Chart
Traders are long on gold
Since Tuesday, the sentiment on the Swiss Foreign Exchange was bullish, as 72% of open position volume was long.
On Monday, 71% of volume was long. Note that the gold sentiment is largely bullish at all times due to long term holders.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 82% to buy the metal. The orders were 62% to buy on Tuesday.