- Market sentiment is 55% short
- 54% of pending orders in 1000-pip range are set to SELL gold
- Gold reaches support line
- Federal Reserve Meeting Minutes
On Wednesday the yellow metal's price reached the lower trend line of a long term ascending channel pattern. However, it did not necessarily indicate that the commodity price would surge.
The Labour Department revealed that the US Producer Price Index climbed 0.4% in January, as forecasted. Data backed-up its growth rate with a strong increase in health care and gasoline prices, which moved up 0.7% and 7.1%, respectively.
The PPI report fuelled expectations that price growth would accelerate in 2018 even with weaker correlation with inflation of consumer prices. Inflation is likely to be lifted towards the Fed's 2% target, owing to tightening job market, weak US Dollar, as well as larger government spending and tax reform.
FOMC Meeting Minutes
The day has come. The Federal Open Markets Committee Meeting Minutes are set to be released at 19:00 GMT. The data release is almost surely going to cause an effect in the financial markets from the side of the US Dollar.
However, the data release will not be covered by the Dukascopy Research team. Meanwhile, take a look at the Duakscopy speculative and the sentiment of other brokers.
XAU/USD respects junior pattern
Tuesday's morning session was spent calmly, as the pair was fluctuating between the 23.60% Fibo and the weekly PP. This still movement changed later in the day when a strong hourly plunge allowed for a breakout of the 200-hour SMA circa 1,335.00. Gold has since edged slightly lower; however, it did remain within the bounds of a narrow short-term channel down.
Given that technical indicators are still located in the oversold region, a bullish recovery is still expected to occur in the nearest time. The pair should gain some pips during the following hours; however, the 1,335.00/1,340.00 area is likely to restrict further advance.
In terms of support, the yellow metal should not exceed the weekly S1 at 1,320.00. The market might also be steady prior to FOMC meeting minutes published at 1900GMT.
Hourly Chart
As apparent on the daily chart, the metal's price is trading in a long term ascending channel. The pair should form a new medium-term channel within its bounds; however, it might take some time for it to reveal itself. Daily technical indicators are in favour of a possible fall this week.
Daily Chart
Market sentiment back to bearish
SWFX market sentiment remains bearish, as 55% of open positions are short. Meanwhile, 52% of pending commands are to buy the commodity.
OANDA traders are bearish, as 54% of open positions are short (-4%). Meanwhile, SAXO bank traders are bullish, as 52% of open positions are long.