- SWFX traders are 55% bearish
- 55% of pending orders in 1000-pip range are set to BUY gold
- Commodity trades just below 1,340.00 mark
- US GDP coming up on Friday
On Tuesday morning the commodity price had begun a surge. The reason for the surge was an encounter of the support of the first weekly support at the 1,328.33 level and the 200-hour SMA, which had been pushing the pair higher since Friday. However, the pair on Tuesday was also supported by the 55 and 100-hour simple moving averages.
US homebuilding activity decreased more than anticipated by the end of 2017 to mark its largest drop in just a year, due to a steep fall in the single-family housing units construction.
US GDP on Friday
The yellow metal's fundamental traders are mostly concerned with the events occurring in the US government. The recent events surrounding the US government shutdown have pushed the US Dollar to a three year low level, forcing the commodity price to the recent high levels.
Although, macroeconomic release swing traders should look forward to this week. The US Advance GDP is set to be released at 13:30 GMT on Friday. This data release is most likely going to cause an increase of volatility.
XAU/USD flashes bullish signals
XAU/USD spent Monday's trading session within the bounds of the 100– and 200-hour SMAs and the weekly PP in the 1,329.07/1,334.85 area. The pair, however, managed to accelerate early today and thus breach a one-week descending channel.
Being supported by the 55-, 100– and 200-hour SMAs circa 1,332.00 is likely to pressure the rate upwards in this session.
Gains, however, are expected to be limited, as the nearest resistance is set by the weekly R1 and a four-month high circa 1,344.00.
By and large, Gold's appreciation during the past trading sessions was driven by the strong support of the 200-hour SMA. It is likely that this moving average continues to provide unbreakable support this week, thus sending the pair above its four-month high.
Hourly Chart
In regards to the daily chart. It has revealed an important piece of information. The pair's recent surge stopped at the 1,345 mark because of a dominant resistance line.
A dominant trend line, which can be drawn by connecting November high levels was at fault. Moreover, by using this line to set a parallel one, a support line can be drawn. Most likely this line will be encountered in the upcoming months.
Daily Chart
Market sentiment on the bearish side
SWFX market sentiment is bearish on Gold, as 55% of open positions are short. However, 54% of pending commands are set to buy the commodity.
OANDA traders are bearish, as 52% of open positions are short. In the meantime, SAXO bank traders are also 52% bearish.