In result of the surge that was triggered by two disappointing macroeconomic data releases as well as the rising 55- and 100-hour SMAs the price of yellow metal ended up at the 1,273.00 mark. The further advance seems unlikely, as the exchange rate faces resistance formed by the monthly PP and the upper trend-line of a four-month long dominant that supposedly started to transform into formation. However, the overall market sentiment as well as allocation of pending orders suggest that rise of the bullion might continue. In case the pair crosses the above barriers, it will be free to climb up to the 1,287.15 level, which represents location of the 100-day .
Despite existence of a strong resistance barrier formed by the monthly PP and the upper trend-line of a four-month long dominant descending channel the yellow metal continued to rally against the buck and managed to reach the weekly R1 at 1,283.37. Apart from this indicator the exchange rate faces no obstacles on its way up until the 1,287.00 level, which represents location of the 100-day SMA.
As more than half of all pending orders are set to buy, the bullion is likely to continue the surge. The upward movement is also supported by the junior ascending channel, which can be clearly seen on daily chart. However, this scenario could be altered if release of the CB Consumer Confidence appears to be worse than expected.
Due to that reason the metal’s price should be watched carefully. An encounter with the mentioned trend line might turn out into a new short term trend, which might take any direction.
The metal might decline down to the 55-hour SMA, begin a consolidation or continue the surge. In short, watch for clues.
As apparent on the chart, the steepness of the rate’s upward move during the past few days has decreased, resulting in a breakout of the minor ascending channel early this morning.
This factor could point to possible weakness. However, if the US Dollar is unable to recover from its recent weakness, Gold is likely to advance even further. The nearest resistance is set by the 23.60% Fibo retracement at 1302.18.
Meanwhile, a possible downside target for this session could be the 1290.00 area, as the 55-hour SMA and the weekly R2 are located nearby.
Just before the year changed and 2018 started, the currency pair reached already above the 1,300 mark. Meanwhile, during the first trading day of the year the commodity price had reached above 1,310 level.
However, after doing a review of the junior channel up pattern’s borders it was discovered that the pair has been slowed down by an upper trend line of the junior pattern. It is possible that the resistance could force the metal’s price slightly lower.
Although, that is highly unlikely.