During the previous trading session the exchange rate indeed formed and made a breakout from junior symmetrical . Fortunately, a combined support formed by the 100-hour and the updated weekly PP at 1,286.16 managed to turnaround the pair. In short run, the surge of the yellow metal once again is likely to be halted near the 1,293.00 and 1,295.00 resistance levels, which might lead to formation of a minor . But in larger perspective the pair is projected to reach the upper boundary of a medium-term near the 1,300-1,302.00 marks. In support of this assumption, 55% of traders remain on the given pair. Moreover, since that area is backed up by the 23.6% level there is little chance that the pair will manage to breakout to the top.
In line with expectations, the yellow metal continued to rally against the buck on Monday. In result of the seven-hour surge, the pair managed to reach combined resistance formed by the monthly and weekly R1 at 1,297.00-1,298.00 and confirmed an assumption about transformation of the channel into the rising wedge formation. The appearance of new pattern only additionally confirmed that bulls are trying to push the rate to the 1,302.00 level. As that area is protected by the 23.6% Fibonacci retracement level, the pair is expected to make a fully-fledged rebound.
However, in shorter perspective there is need to take into account that Trump’s meeting with Senate Republicans regarding prospects of tax reform as well as Powell’s appearance before Congress are likely to lead to strengthening of the buck and retreat to 1,292.00.