In result of the previous trading session the exchange rate slipped to the lower trend-line of a junior , as expected. Although the pattern has been broken, the further plunge still seems unlikely, as the southern side is reliably covered by a combination of the updated weekly PP at 1,316.13 and the 55- and 100-hour SMAs. For this reason, the pair is likely to make one more attempt to reach the upper boundary of a dominant five-month long . Due to absence of any significant data releases the rate might spend most of this week fluctuating between the above trend-line from the north and technical indicators from the south. In larger perspective, bears are projected to take the lead for notable amount of time.
In accordance with expectations, previous trading session the exchange rate spent in a horizontal movement. From the north it was obstructed by resistance zone located between the 1,321.00 and 1,322.00 marks, while from the south it was pressured by the weekly PP and the 100-hour SMA.
As economic calendar remains empty, such flat movement might continue for another two days. In the end bulls might try to push the rate to the upper trend-line of a dominant descending channel. Nevertheless, in daily perspective the same pattern clearly points out on imminence of beginning of a downward movement. The bearish stance on the gold additionally supports this assumption.
Contrary to expectations, gold traders decided not to wait this week’s American fundamental data releases and pushed the pair from symmetrical triangle pattern. Despite combined support level formed by the lower trend-line of an ascending channel and the 200-hour SMA near the 1,310.00 mark, the exchange rate is projected to continue moving downwards.
Such assumption is based on picture seen on daily chart, where the pair has recently made a rebound from the upper edge of a four-month long descending channel. Such scenario is partially confirmed by allocation of pending orders, which are set to sell. In that case the fully-fledged might happen only when the pair will reach the 50% Fibonacci retracement level located at 1,297.200.
Check out our trading platform: