XAU/USD falls by 1.1%
The exchange rate dropped by almost 1.1% on Friday in result of 10 minutes trade that moved about 4 million ounces of the precious metal. Nevertheless, the drop was generally anticipated, as it illustrated a breakout from the rising wedge formation on daily chart. In any case, there are two main options for further movement of the pair. As majority of traders remain bullish on the pair, they might try to elevate it to the pre-fall 1,283.90 level. However, the fact road to the north is obstructed by the weekly PP and the 200-hour SMA as well as the 61.8% retracement level and the monthly PP, the pair is likely to form either a flag or pennant pattern and then resume the downfall. Such scenario would also be in line with trade pattern theory.
The exchange rate dropped by almost 1.1% on Friday in result of 10 minutes trade that moved about 4 million ounces of the precious metal. Nevertheless, the drop was generally anticipated, as it illustrated a breakout from the rising wedge formation on daily chart. In any case, there are two main options for further movement of the pair. As majority of traders remain bullish on the pair, they might try to elevate it to the pre-fall 1,283.90 level. However, the fact road to the north is obstructed by the weekly PP and the 200-hour SMA as well as the 61.8% retracement level and the monthly PP, the pair is likely to form either a flag or pennant pattern and then resume the downfall. Such scenario would also be in line with trade pattern theory.
Comment:
XAU/USD returns to Friday’s 1,284.00 level
In first of yesterday’s trading session the exchange rate made left the junior ascending triangle pattern in southern direction amid strong pressure from the 55- and 200-hour SMAs. However, after making a rebound from the bottom boundary of a large ascending channel it resumed the surge and by the end of the day returned to the pre-fall 1,283.00 level.
From technical point of view, appreciation of the gold is expected to continue not only because of the abovementioned rebound but also because of additional support provided by multiple moving averages as well as the monthly PP at 1,279.41. From fundamental side, an increasing political uncertainty in the UK is likely to support demand for safe haven assets as well. However, this assumption might be easily altered if the released American data will beat experts’ expectations.
In first of yesterday’s trading session the exchange rate made left the junior ascending triangle pattern in southern direction amid strong pressure from the 55- and 200-hour SMAs. However, after making a rebound from the bottom boundary of a large ascending channel it resumed the surge and by the end of the day returned to the pre-fall 1,283.00 level.
From technical point of view, appreciation of the gold is expected to continue not only because of the abovementioned rebound but also because of additional support provided by multiple moving averages as well as the monthly PP at 1,279.41. From fundamental side, an increasing political uncertainty in the UK is likely to support demand for safe haven assets as well. However, this assumption might be easily altered if the released American data will beat experts’ expectations.
Early hours of this trading session showed that yesterday’s attempt to return the price of yellow metal back to the pre-fall 1,283.90 level failed. To be particular, the exchange rate did not manage to bypass the monthly PP at 1,279.41 that was additionally backed up by the slipping 55- and 100-hour SMAs. In the meantime, the fact that it also failed to fall below the slope whose fourth confirmation point lies near the 1,275.80 level indicate on existence of a small ascending triangle formation.
If this assumption is true, then the pair is expected to climb to the 1,279.00 mark. However, then a breakout most probably is going to occur in the opposite direction due to pressure from the above moving averages. But if traders give more weight to the larger rising wedge pattern, the pair is likely to break to the top.