- SWFX traders are 55% bullish
- 51% of pending orders in 500-pip range are set to SELL the gold
- Gold plunges to 1,273.00
- Upcoming Events: Central Bank Communications Conference, US PPI
The yellow metal is continuing lose value against the buck under the pressure from various moving averages. In the upcoming couple of days bears are likely to push the rate to the bottom boundary of a large ascending channel.
The Treasury Department stated that the US Federal Government had a deficit of $63B over the course of October, where higher spending was attributed to disaster relief after a hurricane season. Steven Mnuchin, the US Treasury Secretary, projected that the tax-cut plan is likely to accelerate the US economic growth, which would raise revenue and narrow a fiscal gap. However, higher-than-anticipated deficit highlighted concerns that excess of spending over receipts could increase further.
Silent Monday
Today all eyes of trades are turned to the Central Bank Communications Conference in Frankfurt, where Governors Carney, Kuroda, Yellen and President Draghi are participating in panel discussion about challenges and opportunities of central bank communication.
XAU/USD forms minor triangle pattern
Early hours of this trading session showed that yesterday's attempt to return the price of yellow metal back to the pre-fall 1,283.90 level failed. To be particular, the exchange rate did not manage to bypass the monthly PP at 1,279.41 that was additionally backed up by the slipping 55- and 100-hour SMAs. In the meantime, the fact that it also failed to fall below the slope whose fourth confirmation point lies near the 1,275.80 level indicate on existence of a small ascending triangle formation. If this assumption is true, then the pair is expected to climb to the 1,279.00 mark. However, then a breakout most probably is going to occur in the opposite direction due to pressure from the above moving averages. But if traders give more weight to the larger rising wedge pattern, the pair is likely to break to the top.
Hourly Chart
Daily chart also supports the subsequent plunge of the rate due to pressure from the monthly PP and the 100-day SMA. However, there is little chance that the pair will fall below the bottom edge of an ascending channel, as it is protected by the 200-day SMA.
Daily Chart
Markets sentiment remain bullish
Traders of Dukascopy are bullish on valuation of the gold, as 55% of open positions are long. Accordingly, 55% of pending commands are to buy the commodity.
OANDA traders are bullish, as 70% (-3%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 59% (+2%) of open positions are long.