XAU/USD heads towards weekly R1
In result of the previous trading session, the pair made a breakout from rising wedge pattern that formed at the intersection of two junior ascending channels. Surprisingly, but traders did not show much interest to release of the American housing data or successful vote in the House. Accordingly, the exchange rate continues to slowly climb towards the weekly R1 located at the 1,266.05 level. A major recovery of the buck even in case of adoption of tax bill by the Senate looks doubtful, as the southern side is reliably covered by the monthly S1, the 55- and 100-hour SMAs plus the lower boundary of one of the above channels. On the other hand, a serious appreciation of the bullion is also uncertain due to resistance posed the 38.2% Fibonacci retracement level at 1,268.00.
In result of the previous trading session, the pair made a breakout from rising wedge pattern that formed at the intersection of two junior ascending channels. Surprisingly, but traders did not show much interest to release of the American housing data or successful vote in the House. Accordingly, the exchange rate continues to slowly climb towards the weekly R1 located at the 1,266.05 level. A major recovery of the buck even in case of adoption of tax bill by the Senate looks doubtful, as the southern side is reliably covered by the monthly S1, the 55- and 100-hour SMAs plus the lower boundary of one of the above channels. On the other hand, a serious appreciation of the bullion is also uncertain due to resistance posed the 38.2% Fibonacci retracement level at 1,268.00.
The whole previous trading session the exchange rate spent exactly as expected. First, the yellow metal continued to advance against the buck in a minor rising wedge pattern that has formed at the intersection of two junior ascending channels. Second, it surged to the 38.2% Fibonacci retracement level located at 1,268.00 and then pulled back to the weekly R1. Today the rate is expected resume the upward movement using the support provided by 55-hour SMA that lies along the lower trend line of the pattern.
However, by the end of the day the pattern most probably will be dissolved. In this respect, a resistance zone located around the 1,269.00 level as well as the upcoming release of the US Final GDP data suggests that the breakout will happen to southern direction.