Using support provided by the 55-, 100- and 200-hour SMAs together with the monthly PP , the exchange rate managed to climb to the weekly R1 located at 1,287.92. In other words the pair has practically managed to form the third reaction high of a four-week long . However, a release of widely expected American data created a momentum that enabled bears to return the rate back to the weekly PP at 1,277.10. Hence, all four abovementioned support levels turned into resistance. As they are all concentrated around the 1,279.00 mark, it is unlikely that bulls will manage to push the pair through them without new strong upside momentum. There is a need to notice that the similar situation has already happened in beginning of the week when the gold failed to climb upstairs after a solid strengthening of the buck.
Until beginning of new trading session, a combination of the 55-, 100- and 200-hour SMAs in conjunction with the monthly PP managed to constrain the pair from breaking to the top. However, once the news that the US House of Representatives passed its own version of the tax reform, the gold prices inched to the top. On the one hand, this advance confirmed existence of a minor ascending channel, which, in turn, implies further appreciation of the yellow metal. On the other hand, further road to the north is obstructed by the 1,283.90 and 1,286.13 resistance levels.
In short term, the pair is likely to make a rebound. But, generally, the exchange rate is expected to continue heading towards the upper boundary of a medium-term ascending channel, which is supported by the 61% aggregate bullish market sentiment.
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