- Market sentiment is at equilibrium
- 66% of pending orders in 1000-pip range are set to SELL gold
- Metal restricted by weekly PP
- No fundamentals in this session
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month.
The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
No fundamentals
No significant fundamentals are scheduled for today. Traders should turn their attention to the equities market.
XAU/USD shows slight upside potential
The 55-hour SMA was pressuring XAU/USD from the upside for the whole session on Friday. However, the pair remaining close to this line did suggest that an upside breakout might be due in the nearest time.
This necessary push for bulls occurred during the Asian session when Gold shot up by 0.53% in one hour up to the resistance of the 100-hour SMA and the weekly PP near the 1,325.00 mark.
It is likely that the pair consolidates for a brief period of time prior to re-gaining its upside momentum and pushing even higher in this session. Gains should be capped circa 1,335.00 where the upper boundary of a three-week descending channel, the 200-hour SMA and the 23.60% Fibo retracement line are located.
In case the 100- hour is not breached, the pair is expected to find support at 1,310.00.
Hourly Chart
The medium-term outlook points to a continuous decline. After hitting the 2017 high of 1,360.00, Gold is showing weakness against the Greenback. It is likely that the current movement south prevails until the 55- and 100-day SMAs and the 23.60% Fibo retracement near the 1,300.00 mark is reached sometime this week.
Daily Chart
Market sentiment on the bearish side
SWFX market sentiment is currently standing at equilibrium, compared to 54% of open positions being short during the previous session. Meanwhile, 51% of pending commands are once again to buy the commodity (-7%).
OANDA traders are bearish, as 54% of open positions are short (-1%). Meanwhile, SAXO bank traders are syill bullish with 51% long positions (-1%).