As it was expected, formation of a symmetrical embodied anticipation of release of the American data on Friday. As the actual results beat expectations, bears managed to strengthen the buck against the yellow metal by 0.84% just in one hour. There is a need to notice two things. First, a rebound near the 1,266.00 mark can be interpreted as a second reaction low a previously undetected junior . This assumption implies gradual movement in the northern direction.
However, in short term this recovery looks doubtful due to combined resistance that is forming from the weekly PP at 1,273.35 and the falling 55-, 100- and 200-hour SMAs. There is also a need to take into account an existence of a slope that consists of Sep 7, Oct 15 and Nov 2 maximums and is likely to stop the pair from surging until a rebound from the bottom edge of a dominant channel up.
A sudden cleansing in the Saudi establishment enhanced uncertainly about the situation in the Middle East and, as a result, magnified demand for gold. On hourly chart this search for safe haven assets signified creation of a second reaction low a two-week long junior ascending channel. Moreover, the rapid surge allowed the pair to rapidly reach the weekly R1 at 1,281.00. As markets have calmed down already, bears are expected to start pushing the pair back to the bottom.
However, there is little chance the rate will succeed to return back to support zone near 1,268.00, as the road to the south is obstructed by a combination of the 55-, 100- and 200-hour SMAs together with the weekly PP at 1,273.35. Unless the rate receives a proper impulse, it is expected to halt the fall there.
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