XAU/USD fails to break below 1,273.20 again
Morning outlook - XAU/USD fails to break below 1,273.20 again
A release of better than expected data on the US non-manufacturing activity initially caused a great anxiety in the markets. However, a sharp appreciation of the buck was constrained by the 55-hour and 100-day SMAs near 1,273.20. On the one hand, gold traders most probably are going use the above support, as a trampoline, to try to restore some lost positions and return the rate back to the 1,281.00 mark. On the other hand, a presence of the 61.8% Fibonacci retracement level, the 100- and 200-hour SMAs as well as the upper boundaries of two larger descending channels is likely to neutralize the potential surge. Despite the 60% average bullish sentiment, the pair is expected to continue to move in the southern direction, in accordance with the general downtrend.
A release of better than expected data on the US non-manufacturing activity initially caused a great anxiety in the markets. However, a sharp appreciation of the buck was constrained by the 55-hour and 100-day SMAs near 1,273.20. On the one hand, gold traders most probably are going use the above support, as a trampoline, to try to restore some lost positions and return the rate back to the 1,281.00 mark. On the other hand, a presence of the 61.8% Fibonacci retracement level, the 100- and 200-hour SMAs as well as the upper boundaries of two larger descending channels is likely to neutralize the potential surge. Despite the 60% average bullish sentiment, the pair is expected to continue to move in the southern direction, in accordance with the general downtrend.
In accordance with expectations, the yellow metal managed to restore some lost positions against the buck yesterday. However, this surge lasted only until the pair hit the 61.8% Fibonacci retracement level, which matched with beginning of Governor Powell’s speech.
In result of the downfall, the pair approached the weekly S1, which is located at the 1,266.63 level. Although the first attempt to break to the bottom was not successful, eventually the pair is expected to bypass this barrier. Not only because the northern path is now secured by a combination of the 55-hour and 100-day SMAs, but also because the rate is moving in a medium-term downtrend, which should lead it to the bottom trend-line of a dominant, long-term ascending channel.