- SWFX market sentiment 58% short
- Pending orders in the 1000-pip range are set to buy in 56% of cases
- Gold price volatility is high
The yellow metal on Monday traded above the 1,290.00 level, where it was supported by a Fibonacci retracement level. Meanwhile, the commodity price faced no resistance as high as the 1,300.00 level.
Latest Notable Fundamental Event
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."
Canadian events take most attention
There are notable macroeconomic and monetary events taking place this week that are scheduled to be covered by Dukascopy and are expected to cause fluctuations in the Forex market.First up on Tuesday the Canadian Trade Balance will be published at 13:30 GMT. The event is expected to cause a bounce from 10 to 35 base points.
Afterwards, Wednesday will be the busiest day of the week for macroeconomics. At 15:00 GMT the Bank of Canada will publish its Overnight Rate. The bank is set to hike their interest rate from 1.75% to 2.00%. Due to that reason the USD/CAD is expected to fall at least 50 base points.
Afterwards, take into account that the big once per week move on oil due to US Crude Oil Inventories is scheduled to occur at 15:30 GMT. During the past month oil prices bounced from 40 to 80 cents per barrel on the announcement.
The busy day will end with the FOMC Meeting Minutes publication at 19:00 GMT. During the event the market usually does not fluctuate. However, surprises are possible.
Last but not least will be the releases on Friday. UK GDP and Manufacturing Production are expected to cause a 20 pip move at 09:30 GMT. At 13:30 GMT the US CPI and Core CPI data sets might cause a 10-30 pip move.
XAU/USD short term forecast
The 23.00% Fibonacci retracement level at the 1,295.57 mark retraced the yellow metal during the morning hours on Monday.
It is expected that the 23.60% Fibonacci retracement level will keep retracing the gold during the trading session on Monday. Most likely, the yellow metal will be trading sideways to stay at the 1,285.00 level for the rest of the day.
However, today's US ISM Non-Manufacturing PMI data release at 15:00 GMT could push the rate to break the resistance level of the 23.60% Fibo to continue the surge towards the upper boundary of the dominant pattern line at the 1,300.00 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 short the metal
On Monday, 58% of trader open gold positions were short. Last year traders were massively long. That sentiment has slowly become short.
In the meantime, trader pending orders in the 1000-base point range were set to buy the metal in 57% of cases.
The buy orders are the take profits and stop losses of the short positions.