XAU/USD breaks from falling wedge
Morning outlook - XAU/USD breaks from falling wedge
In result of the previous trading session, the exchange rate made a breakout from the falling wedge formation. The surge was not sharp, as the pair was slowed down by a combination of the 55- and 100-hour SMAs as well as the 61.8% Fibonacci retracement level. In first half of the day the pair is expected to test the 200-hour SMA near 1,284.77. The strength of this moving average most probably will force the pair to temporarily retreat.
In larger perspective the yellow metal might notably recover against the buck, as the above breakout simultaneously signified a rebound from the bottom trend-line a one-month long ascending channel. In that case, there the pair is unlikely to reach the support line of a long term dominant ascending channel in the foreseeable future.
In result of the previous trading session, the exchange rate made a breakout from the falling wedge formation. The surge was not sharp, as the pair was slowed down by a combination of the 55- and 100-hour SMAs as well as the 61.8% Fibonacci retracement level. In first half of the day the pair is expected to test the 200-hour SMA near 1,284.77. The strength of this moving average most probably will force the pair to temporarily retreat.
In larger perspective the yellow metal might notably recover against the buck, as the above breakout simultaneously signified a rebound from the bottom trend-line a one-month long ascending channel. In that case, there the pair is unlikely to reach the support line of a long term dominant ascending channel in the foreseeable future.
After making a breakout from the falling wedge formation, the yellow metal was expected to continue the surge at least until the clash with 200-hour SMA. However, a plunge in Euro amid the ECB meeting led to downfall of the exchange rate. As a result, it has finally slipped below the weekly S1 located at the 1,269.58 mark.
Such outcome simultaneously signified dissolution of the junior ascending channel and increased probability of a contact with combined support formed by the 200-day SMA and the bottom trend-line of the dominant ascending channel. In fact, on hourly chart at the moment there are no technical barriers between the above barriers and the exchange rate. However, a release of the US Advance GDP might alter this scenario and restore the value of gold.