- SWFX traders are 52% bullish
- 61% of pending orders in 500-pip range are set to BUY the gold
- Pair tends to break to the top
- Upcoming Events: US ADP Non-Farm Employment Change, ISM Manufacturing PMI, FOMC Statement and Federal Funds Rate
Gold price increases, as traders anticipate the upcoming FOMC Statement and possible announcement of the new Fed Chair. Accordingly, bulls are trying to push the rate through combined resistance set up by the 61.8% retracement level and the weekly PP.
The Commerce Department showed that consumer spending, which constitutes nearly two-thirds of the US economic output, grew 1.0% in September, the strongest gain since 2009, after a modest 0.1% rise in the prior month. The increase was driven by households replacing hurricanes-damaged vehicles as well as higher purchases on utilities. The Federal Reserve is set to announce its interest rate decision on Wednesday, taking into account current inflation trends.
Consumer Confidence in focus
Starting from 12:30 GMT traders will have an opportunity to observe three different American data releases. The first one will be the Employment Cost Index. At 13:45 GMT will be publish Chicago PMI and, finally, at 14:00 GMT the CB Consumer Confidence Index. The last event will be covered by the Dukascopy Research Team.
XAU/USD tests 200-hour SMA
In line with expectations, until release of the US macroeconomic data the pair was moving relatively steady. However, as soon as markets found out that one the leading indicators, the Consumer Confidence Index, substantially exceed expectations the rate plunged to the 1,269.37 level. Nevertheless, the upcoming FOMC meeting as well as employment data release does not allow reinforcing this success. On the other hand, in order to break to top the pair still needs to bypass the weekly PP, the upper boundary of a descending channel and, most importantly, the 200-hour SMA. Previous failed attempts suggest that until the first release these barriers are likely to constrain active rise of the yellow metal's price. In case of positive news, the pair is expected to repeat previous Thursday's downfall and reach the weekly S1 at 1.264.23.
Hourly Chart
On daily chart the pair continues to fluctuate near the 100-day SMA and the 61.8% Fibonacci retracement level. As it was mentioned yesterday, this combined resistance should be strong enough to force the pair to make a rebound (especially when the rate has been already forced to retreat more than once in the past). In addition to that there is also an alleged resistance line, made from September's and October's maximums, which should prevent the rate from surging any further.
Daily Chart
Markets sentiment remain bullish
Traders of Dukascopy are neutrally bullish on valuation of the gold, as 52% of open positions are long. Accordingly, 52% of pending commands are to buy the commodity.
OANDA traders are bullish, as 69% (+1%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 58% (+0%) of open positions are long.