- Market sentiment is 51% bearish
- 52% of pending orders in 1000-pip range are set to SELL gold
- Bullion fails to reach above 1,320 mark
- The metal books a new low level
On Tuesday the bullion continued its retreat, as the US Dollar gained strength amid a massive equity sell off. However, on the hourly chart the premises of an ascending pattern were being spotted. It is possible that the support of that pattern will hold and a new medium term surge begins.
The US Census Bureau revealed on Friday that the US building permits data did not meet expectations, showing the growth pace of only 1.30M units in February, following the downwardly revised 1.38M reading in the prior month.
The stronger-than-expected fall in the US homebuilding was caused by a plunge in the multi-family housing construction offsetting a rise in single-family projects for the second month in succession.
First rate hike incoming
Wait for tomorrow. Jerome Powell is set to hike the US interest rates at 18:00 GMT. However, there is a larger event occurring caused by the Federal Reserve, which might get even more attention.
Namely, the head of the Fed is set to host a conference after the rate announcement, which is expected to have a similar format to the ECB press conferences that follow the European rate announcements. However, the exact format is still set to be seen.
XAU/USD stranded by SMAs
A reversal from the 1,310.00 territory early on Monday was followed by a sharp upside pressure for Gold, as the weakening of the US Dollar boosted demand for the commodity. As a result, the 55-hour SMA and the 38.20% Fibonacci retracement were breached.
The Asian session marked a slight decline in price, as traders are awaiting patiently the first Fed rate hike this year.
In terms of technicals, Gold faces strong resistance of the 100– and 200-hour SMAs and a down-trend near the 1,320.00 mark.
It is likely that bulls fail to gather enough momentum in to push above this area this session. Thus, the yellow metal should push lower down to the 55-hour SMA. No additional support is provided until 1,310.00.
Hourly Chart
However, on the daily chart it looks more like the pair is encountering a medium term resistance line, which is forcing the commodity price into a retest of the now active long term almost horizontal descending channel pattern.
Although, just above the mentioned pattern's support line are located additional levels of significance. Namely, the weekly S1 is providing support at 1,306.17 and the 100-day SMA is approaching from the downside near the 1,305 mark.
Daily Chart
Markets short the metal
SWFX market participants continue to short the metal, as traders are 51% bearish.
Meanwhile, pending commands have become slightly bullish, as 53% of all set up orders were to buy.
OANDA traders remain slightly bullish, as 55% of open positions were long on Tuesday. In addition, Saxo bank traders are going long in 52% of all cases.