- SWFX traders are 55% bearish
- 72% of pending orders in 800-pip range are set to BUY
- Pair fails to sneak below 55-hour SMA
- Upcoming Events: US Trade Balance, ISM Non-Manufacturing PMI
On Tuesday, the exchange rate had finally bypassed the weekly R1, using the 55-hour SMA as a springboard. Today, the pair has a good chance to repeat its success and try to reach the next target, which consists of the monthly R1 and the upper trend-line of a medium-term ascending channel.
The Commerce Department stated that orders for US-made goods tumbled 3.3% in July, as the demand for transportation equipment slumped in the same period. However, capital goods orders were stronger than the prior report showed, suggesting a solid business spending in the early Q3. Moreover, an increase in production could be fuelled by expected rise in demand for motor vehicles, as residents in storm-battered Texas aim to replace damaged cars.
Release of the day: ISM Non-Manufacturing PMI
This Wednesday will bring much important news about the current state of the Canadian economy, including an announcement of information on the Overnight Rate. From the United States perspective the picture is not so colourful, as the only notable data release will happen at 14:00 GMT, when the Institute for Supply Management will publish the latest updates on the Non-Manufacturing PMI Index.
XAU/USD finally breaks weekly R1
The way the yellow metal moved yesterday gives us an important clue for the further analysis. First, the buck failed to drag the pair down through the 55-hour SMA. Second, the gold managed to recover and break through the weekly R1 at 1,339.42.
These facts suggest that the today the exchange rate most likely will fail once again to sneak to the bottom. And in the meantime, it has a good chance to try to reach the monthly R1 at 1,348.36, using the abovementioned support.
However, both these assumptions hold true until a release of the US ISM Non-Manufacturing PMI at 14:00 GMT. An effect from this data release might either help the bullion to jump even higher, or will strengthen the buck and push the pair closer to the 100-hour SMA.
Hourly Chart
From a daily perspective, the exchange rate is continuing to move towards the upper edge of a long-term ascending channel, which is located slightly above the monthly R1 at 1,348.37. In addition, there is a need to notice that over the last two weeks the gold is moving precisely along the vertical line, which can be classified as a part of a bump and run reversal pattern.
Daily Chart
Markets sentiment remains bearish
Traders of Dukascopy remain bearish on the price of gold, as 55% of open positions are short. Accordingly, the same percentage of pending commands is to buy the commodity. Moreover, 43% of pending orders are set to sell the buck.
OANDA Gold traders remain neutral, as open positions are 51% bearish. In the meantime, SAXO bank traders are neutrally bearish, as 55% of open positions are short.