Morning outlook - XAU/USD slips to 1,303.75
- Yesterday the American Dollar continued to strengthen against the yellow metal and even managed to form a little descending triangle, whose lower support line matched with the upper boundary of a former long-term ascending channel.
- In the early Thursday morning the bullion lost another 0.33% and slipped below the 100-hour SMA. On the one hand, a forming downtrend suggests that the plunge can continue at least until the 200-hour SMA near 1,295.80. On the other hand, over the last three days appreciation of the buck was mainly driven by various fundamental events.
- In contrast, today there will be no significant data releases that could give the Dollar a necessary impulse for the further surge.
As soon as the buck stopped to receive feeding from various macroeconomic data releases, the yellow metal started to actively recover. In result of the yesterday’s surge, the pair has entered into a junior descending channel.
Accordingly, today it is expected to move downwards, successfully breaking through the weekly R3 at 1,316.51. Nevertheless, the fall is not expected to last for long due to presence of a combined support level set up by the 55- and 100-hour SMAs.
On the other hand, there is a need to take into account an effect from release of another fundamental data later this day. If it fails to justify expectations, the weakening buck might push the pair out of the channel in the northern direction.