- Market sentiment is 56% bearish
- 72% of pending orders in 1000-pip range are set to SELL gold
- The yellow metal's price remains in junior ascending pattern
- Gold prices plummeted on Tuesday
The yellow metal has broken previously active pattern's trend lines. The reason for that was the testimony of the head of the US Federal Reserve.
Durable goods orders report was one of the weakest currency triggers on Tuesday; in fact, it could not compete with the Fed Chair Powell testimony, making the overall sentiment hovering in limbo.
The Commerce Department said that the US durable goods plummeted 3.7% for the month of January. The drop occurred because the demand for transportation equipment tumbled 10.0%, reaching a six-month low, following a 2.6% increase in the prior month.
US GDP release
It is most likely that there will be still action occurring in the aftermath of the Jerome Powell' speech. However, there is another data set about to be released on Wednesday, which can be swing traded.
Namely, the US Preliminary GDP is scheduled to be published at 13:30 GMT. In regards to macroeconomic data releases this is the mother of all of them. The US Preliminary GDP has proven itself through mathematical tests to be second only to a change in the Federal Funds Rate announcement.
The data release will be covered by the Dukascopy research team on the bank's live webinar platform. The coverage is set to start ten minutes before the release.
To join the webinar one needs to click on the notification that should pop up a minute before the start on all of the bank's trading platforms. On the other hand joining is possible at any time by either googling Dukascopy webinars or finding them in the TV section.
XAU/USD trades sideways
After the massive drop caused by the appreciation of the US Dollar on Tuesday, the yellow metal's price traded sideways between two pivot point levels. However, it was about to continue the decline.
The reasons for such hypothesis are two. First is the fact that the metal has fully confirmed the breaking of the previous dominant channel up pattern. Second is the fact that the fall of Tuesday revealed a junior channel down pattern.
In general, the surge should occur, when the upper trend line of the junior pattern forces the commodity price lower through the support of the weekly PP, which is located at the 1,316.08 level.
Hourly Chart
The fundamental events of Tuesday managed to finally force the commodity price into breaking free from the previously active long term chart's medium scale pattern. However, this move was expected to occur.
Meanwhile, it seems that a new medium scale pattern has been properly spotted. In accordance with that pattern, drop down to as low as 1,300.00 mark might occur. Although, before that the support levels near the 1,320.00 and 1,310.00 levels should be passed.
Daily Chart
Market sentiment switches to shorting the bullion
SWFX market sentiment remains 56% bearish. Meanwhile, pending commands are set to sell the bullion in 52% of all cases.
OANDA traders are almost neutral, as 51% of open positions are long. In addition, SAXO bank traders are 53% bullish.