XAU/USD tests upper boundary of senior channel
During the last trading session the exchange rate expectedly tried to break through the upper boundary of a senior descending channel. In the middle of the day it even managed to reach the alleged resistance zone near 1,259.00 but then was forced to retreat. Today these attempts are expected to resume due to continuous pressure exercised by the 55 SMA. However, the growing optimist related to adoption of tax bill by the Congress is likely to result in ultimate appreciation of the buck. On the other hand, an effect from this fundamental event might not be especially sharp due to existence of a strong support zone located around the 1,254.00 mark that is backed up by the 200-hour SMA.
During the last trading session the exchange rate expectedly tried to break through the upper boundary of a senior descending channel. In the middle of the day it even managed to reach the alleged resistance zone near 1,259.00 but then was forced to retreat. Today these attempts are expected to resume due to continuous pressure exercised by the 55 SMA. However, the growing optimist related to adoption of tax bill by the Congress is likely to result in ultimate appreciation of the buck. On the other hand, an effect from this fundamental event might not be especially sharp due to existence of a strong support zone located around the 1,254.00 mark that is backed up by the 200-hour SMA.
In accordance with expectations, a support zone formed near the 1,254.00 mark did not allow the buck to gain value, while the rising 55-hour SMA pushed the yellow metal higher. In result of the soar, the pair has broken the three-week long ascending channel and started new trading day from the monthly S1 at 1,261.45. As the exchange rate is located in an ascending channel the surge is expected to continue.
However, an alleged resistance located around the weekly R1 at 1,266.05 most probably will halt the upward movement, while adoption of tax bill by the Congress later this day might dissolute the above pattern and throw the rate back to the 100-hour SMA. In case of disappoint news the price of the bullion could spike right to the 1,270.00 mark.