- Removing the midline activates further growth.
- Today, U.S. manufacturing and services data should be a big mover.
- BOC’s press conference could change sentiment.
Gold is trading at $2,033 at the time of writing. With the US dollar losing momentum, the metal seems determined to make new highs.
In the short term, XAU/USD will remain flat. Therefore, you will have to wait until a clear direction is given.
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Yesterday, the Bank of Japan left monetary policy unchanged and the New Zealand Consumer Price Index rose by 0.5%, as expected.
Today, manufacturing and services data and BOC should drive the market. Services and manufacturing in Germany and the euro area confirmed contraction again, while the UK’s Flash Services PMI was reported to be 53.8 points higher than the expected 53.1 points, announcing further expansion.
Thereafter, the US flash manufacturing PMI is expected to decline from 47.9 points to 47.6 points with further contraction, while the flash services PMI may remain at 51.4 points in the second month of January.
Additionally, the Bank of Canada should maintain the overnight interest rate at 5.00%. Still, sentiment could change depending on the BOC press conference, BOC interest rate statement, and BOC monetary policy report. Tomorrow’s ECB and US Advance GDP are high-impact events.
Gold price technical analysis: bullish momentum
From a technical perspective, XAU/USD looks undecided in the short term. Price movements have developed a symmetrical triangle, so only escaping this pattern will bring new opportunities.
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The yellow metal was found to be in demand above $2,020. It is now approaching new highs. I drew an upward-pointing rake because I wanted to capture the upward movement. Price is trapped between the median line and the lower median (ML) line (LML).
A valid breakout through the triangle resistance and above the midline could prove more growth and be viewed as a long opportunity.
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