- SWFX market sentiment is neutral
- Pending orders in the 1000-pip range are set to buy in 56% of cases
- Gold has continued to surge above expectations
On Wednesday, the yellow metal touched the 1,290.00 level. In the last year's last review it was noted that the metal has reached the long term target of 1,260.00. The target was picked due to the rate facing the resistance of a large scale pattern near that mark. However, that trend line was broken.
Latest Fundamental Event
The European Single Currency depreciated against the US Dollar, following the US FOMC Meeting Minutes release on Wednesday at 19:00 GMT. The EUR/USD exchange currency rate lost 34 pips or 0.30% during a minute, right after the release. The European Single Currency continued trading at the 1.1370 area against the US Dollar.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The key highlight from the official statement, "Fed raises target interest rate to 2.25-2.50 pct, reduces expected hikes for 2019 to two from three."
Week will end with US and Canadian data
The first week of the year will have a notable data release occurring. Namely, on Friday at 13:30 GMT the Canadian and US statisticians are expected to publish their employment data.In both countries the Average Earnings, Change in Employment in real numbers and the official Unemployment Rate will be published. This data release has caused an increase of volatility on the USD/CAD from 30 to 70 base points.
The data release will be covered during a live stream on the Dukascopy Webinars YouTube channel. The event will start at 13:20 GMT.
XAU/USD short term forecast
The yellow metal's price has surged above the 1,285.00 level by the middle of Wednesday's trading session. Moreover, the surge was expected to continue.
In general, it could be observed that the commodity price was pushed higher by the 55-hour simple moving average. The price surged and retraced back down to the SMA during the last couple of weeks.
Meanwhile, note that the rate will face the resistance of a 23.60% Fibonacci retracement level at the 1,291.57 mark.
Hourly Chart
The daily chart's patterns are broken. The metal has extended its gains far beyond expectations.In addition, note that the simple moving averages are now located far below the commodity price. Most likely a retracement downwards will occur in the near term future.
Daily Chart
Traders are neutral after the surge
Traders of the Swiss Foreign Exchange are mostly neutral in regards to the yellow metal. Namely, 50% of open positions were long.
However, this means that even the long term traders have closed their long positions, as during short term fluctuations at the end of the last year the sentiment would bounce around the 70% mark.
In the meantime, trader pending orders in the 1000-base point range were set to buy the metal in 56% of cases.
It indicates that although most have taken profits from the metal, some are considering reopening their long positions.