XAU/USD Analysis: Surges to weekly R1

Contrary to prognoses, the upper trend-line of a four-month long descending channel could not constrain the yellow metal from breaking above the 1,230.00 level. It appears that the surge was mainly based on fundamentals, such as signs of the upcoming monetary policy tightening in Europe and unclear picture on global demand prospects from Chinese trade data. For now, the exchange rate has stuck between the weekly and monthly R1. An aggregate of technical indicators points out on continuation of the surge. In case these barriers are broken, the pair will face no obstacles on its way up until the weekly R2 at 1,339.62. In case of rebound, a combination of three moving averages together with the bottom edge of a four-week long ascending channel is expected to provide support.

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