- SWFX traders are 51% bullish
- 67% of pending orders in 500-pip range are set to BUY the gold
- Gold price falls from triangle pattern by 0.9%
- Upcoming Events: ISM Manufacturing PMI, FOMC Members Kaplan and Harker Speak
During previous trading session the pair continued to fall towards the bottom boundary of a senior descending channel. In larger perspective, the pair faces no obstacles from the southern side. Hence, movement to the downside is expected to continue even with minor corrections.
US consumer inflation growth weakened in October, as the hurricane-related increase in purchases of motor vehicles started to fade. The Fed's closely watched inflation measure, the Core PCE Price Index excluding energy and food increased 1.4% year-over-year in October, though the figure undershot the bank's 2% target for more than 5 years. Recent economic data strengthened projections for the Fed to raise borrowing costs once again in December.
Manufacturing PMI data release
The main event of the day will happen at 15:00 GMT when the ISM will release a result of its latest survey on the status of the US Manufacturing PMI. Other events are not expected to cause any notable price movements.
XAU/USD breaks from junior channel up
Formation of a minor pennant pattern, indeed, pushed the further downwards. However, the bottom edge of a junior ascending channel was expected to withhold the pressure. The fact that the buck continued to appreciate against the gold in based not only on release of satisfying macroeconomic data yesterday. Most probably the maximum that the pair has reached on November 27 was interpreted as a rebound from the upper trend-line of a larger descending channel, while the subsequent massive plunge simultaneously signified a breakout from the junior rising wedge formation. If this view dominates the market, then the bearish pressure is expected to continue until the pair reaches the lower support line of a dominant long-term ascending channel near 1,271.00. As for today, unless some event causes high volatility the pair is likely to fluctuate between the 1,276.50 and 1,271.50 levels.
Hourly Chart
At the moment, the pair is trading at intersection of a senior descending and dominant ascending channels. From northern side it experiences pressure from the weekly S1, the monthly PP and two moving averages, while the southern side is barrier-free except for the 200-hour SMA and the 38.2% Fibonacci retracement level that lie at the bottom boundary of the above dominant pattern. For this reason, the pair is expected to continue heading towards the 1,270.00 mark.
Daily Chart
Markets sentiment remain bullish
Traders of Dukascopy are neutral on valuation of the gold, as 51% of open positions are long. Accordingly, 51% of pending commands are to buy the commodity.
OANDA traders are bullish, as 72% (+3%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 63% (+2%) of open positions are long.