- Market sentiment is 52% bullish
- 53% of pending orders in 1000-pip range are set to SELL gold
- The yellow metal's price bounces off the 1,320 level
- Speeches and employment release
The 1,320 level has held its ground and even forced the pair to break the week long descending channel pattern. Due to that reason it can be expected that new patterns will form in the near future, as the previous one was too narrow for a long term channel.
The US National Association of Realtors reported that in January the existing home sales slumped for the second month in a row. Contrary to economists' expectations for the number to have surged 0.9%, existing home sales declined 3.2% in the reported month.
It was the largest drop on year-to-year basis over the three-year period. Yet, the demand for housing is increasing due to the boosting labor market, which results as a shortage of buying opportunities for some potential first-time buyers.
Events that might surprise
By looking at what is left for this week in regards to data releases that might cause fluctuations, two events can be noticed. However, both of them could cause a reaction only if they significantly differ from the forecasts.
Namely, on Thursday watch out for the US Unemployment Claims at 13:30 GMT. On Friday watch the various FOMC member speeches, which are set to occur in the second part of the day. To be exact at 15:15 GMT Dudley speaks, at 18:30 GMT Mester gives a speech, and at 20:40 GMT Williams will express his views.
XAU/USD unlikely to surpass 1,340
Following a test of the weekly S1 at 1,320.70, bulls took over the market and managed to push the yellow metal 0.8% higher within a couple of hours. The pair, however, stopped short of the expected daily high of 1.338.00, as the Asian session introduced some minor downward pressure.
By early Friday, Gold was testing the support of the 55-hour SMA circa 1,326.00. Even though technical indicators flash bullish signals in this session, the pair might fail to breach the massive resistance cluster formed by the 100– and 200-hour SMAs, the 23.60% Fibo and the monthly PP. Thus, this 1,340.00 might be the daily high for today.
In terms of support, the rate could halt near the weekly S1 at 1,320.00 and spend the day fluctuating between this level and the above 1,340.00 area.
Hourly Chart
The daily chart shows that the long term ascending pattern has had its lower trend line pierced. That indicates that the pattern might become obsolete in the near future.
Meanwhile, daily technical indicators were in favour of a possible fall this week. The forecast has become reality, as the metal's price has reached the lower trend line of the named long term channel up pattern at the 1,320 mark.
Daily Chart
Market sentiment becomes bullish
SWFX market sentiment has become 52% bullish. Meanwhile, all of the pending commands combined are neutral.
OANDA traders are bearish, as 53% of open positions are short (+2%). Meanwhile, SAXO bank traders are neutral.