Gold Price Accumulating Bullish Energy Despite Stronger USD
- Escaping from the current range could bring new trading opportunities.
- The manufacturing and services data could greatly impact XAU/USD today.
- In the short term, it could continue to move sideways.
The price of gold was trading at $1,673 at the time of writing. In the short term, it’s ranging and seems undecided ahead of the Eurozone, UK, and US manufacturing and services data.
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Surprisingly or not, the XAU/USD failed to develop a strong move in one direction after the FOMC, BOE, BOJ, and SNB. As expected, the FED, Bank of England, and Swiss National Bank increased the interest rates. Only the BOJ maintained the monetary policy unchanged, keeping the BOJ Policy Rate in the negative territory at -0.10%.
Later, the German Flash Manufacturing PMI could drop from 49.1 to 48.3 points, while the German Flash Services PMI is expected at 47.2 points versus 47.7 points in the previous reporting period. Furthermore, the Eurozone Flash Services PMI and the Flash Manufacturing PMI dropped compared to the previous reporting period.
Today, the fundamentals could drive the markets. The UK Flash Services PMI may drop from 50.9 to 49.9 points signaling contraction, while the Flash Manufacturing PMI could be reported at 47.4 points above 47.3 in the previous reporting period. In addition, the Canadian retail sales data could have an impact on Gold as well.
As you already know from my analyses, a strong USD could force the XAU/USD to drop. The US Flash Services PMI could jump from 43.7 points to 45.5 points, while the Flash Manufacturing PMI is expected at 51.0 points. Better than expected, US figures could boost the greenback and push gold prices down.
Gold price technical analysis: Symmetrical triangle
As you can see on the hourly chart, the price continues to move sideways between $1,688 and $1,654 levels. In the short term, it develops a symmetrical triangle. Escaping from this pattern and the extended range could bring new opportunities and confirm a clear direction. XAU/USD changed little, but the fundamentals could force the rate to register sharp movements.
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From the technical point of view, the price action signaled exhausted sellers after failing to make a new lower low and registering only false breakdowns below $1,659. Still, only a new higher high, a valid breakout through the $1,688, could activate a larger swing higher, a new leg higher.
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