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"Prices have been boosted by hopes of QE by the European Central Bank, which is expected to have far-ranging effects on the bond market."
- Phillip Futures (based on CNBC)
Pair's Outlook
As it was expected, XAU/USD's bulls managed to accumulate enough momentum in order to gain significant value during trading on Tuesday. Gold surged above the 61.8% Fibonacci retracement and has also crossed a major resistance line represented by the monthly R2 at $1,283. Moreover, on Wednesday morning an upward trend continued, while gold was pushed above $1,300 per ounce. Nevertheless, the closest supply area around $1,305 (2011 low; weekly R1) is expected to keep bulls under pressure for the next 24 hours.
Traders' Sentiment
Distribution between opened positions for buying and selling the precious metal is still remaining rather positive and in favour of former, while bullish advantage over bears increase three percentage points from Tuesday to reach 61%. However, it still stays below 64% seen in the beginning of the week.
© Dukascopy Bank SA