XAU/USD relentlessly tries to reach monthly R1 at 1,298.00

FX_IDC:XAUUSD   Gold Spot / U.S. Dollar
XAU/USD relentlessly tries to reach monthly R1 at 1,298.00

Despite release of better than expected American housing data the bullish pressure prevailed. To certain extent, the surge was supported by a combination of the 55-, 100- and 200-hour SMAs in conjunction with the monthly PP . However, the fact that the pair managed to break through the upper boundary of medium-term ascending channel and practically reach the monthly R1 at 1,298. 01 suggests that traders were also concerned about discussion and vote on the new tax reform plan.

At the moment, it is too early speak about dissolution of the above pattern, as it is possible to simply adjust its boundaries. In that case, the exchange rate is expected to start moving in the opposite direction and trying to reach the weekly PP at 1,287.22, which soon will become additionally strengthened by the rising 55-hour SMA .
Comment: XAU/USD drops by 1.27%

Growing fears about inevitability of snap parliamentary elections in Germany led to appreciation of the Dollar against basket of currencies, including the yellow metal. In result of this downfall, the exchange rate reached and made a rebound from the bottom edge of a senior ascending channel.

As market sentiment remains 56% bullish, traders are expected to make numerous attempts to push the pair through all three moving averages and return it to the pre-fall 1.293.00 level. However, without similarly strong impulse this recovery is likely to be delayed until tomorrow. In this sense, declaration of North Korea, as a sponsor of terrorism, barely helped the pair to break through the monthly PP at 1,279.41.

Comment: XAU/USD struggles to break through MAs

As it was expected, lack of an upside momentum did not allow the pair to surge above the 1,282.00 level. Nevertheless, these attempts are expected to resume.

First of all, two days ago the exchange rate made a rebound from the bottom trend-line of a large ascending channel, which implies the subsequent advance in the opposite direction. Second, yesterday’s movement defined the boundaries of a new junior ascending channel, which is expected to provide an additional support for successful breakout through the 55- and 100-hour SMAs. Third, there will be a release of data on the US Core Durable Goods Orders, which are projected to decrease this, thus leading to deprecation of the Dollar. Finally, 63% of traders keep bullish outlook on the price of yellow metal.

Comment: XAU/USD reaches resistance at 1,294.50

The yellow metal continued to rally against the buck after making a rebound from the bottom trend-line of a medium-term ascending channel. By the end of the day the pair has reached resistance zone near the 1,294.50 mark and made a rebound amid optimistic economic outlook expressed in the FOMC Meeting Minutes.

Accordingly, in first half of this trading session the pair might temporarily retreat to the weekly PP located at 1,287.22. However, the deeper plunge is unlikely due to support provided by the rising 55-, 100- and 200-hour SMAs. On the other hand, as bearish momentum comes to an end, the rate might actually stay within boundaries of another junior ascending channel and try to bypass the above resistance one more time. In general, appreciation of the bullion is expected to last at least for another three days.

Comment: XAU/USD forms symmetrical triangle

On the one hand, in first half of the previous trading session the exchange rate expectedly tried to slip to the weekly PP at 1,287.22. On the other hand, without sufficient liquidity related to beginning of holidays in the United States the pair could not surge above resistance near the 1,293.00 either. As a result, it formed a minor symmetrical triangle, which is expected to be broken by the end of this week.

The breakout to the bottom seems unlikely, as the aggregate market sentiment remains 54% bullish and the pair is generally advancing in an ascending channel. But even if it happens the plunge is unlikely to go below the above weekly PP that is additionally backed up by the 55- and 100-hour SMAs. However, in case of surge it is still doubtful that the pair will sneak above the 1,295.00 mark.