- SWFX market sentiment is 73% bullish
- 64% of pending orders in 1000-pip range are set to SELL Gold
- No data releases on Tuesday
On Tuesday, the yellow metal slightly recovered after reaching below the 1,195.00 level The move was caused from a technical perspective by the lower trend line of a dominant descending pattern.
Oil prices decreased after US Crude Oil Inventories data release on Wednesday at 14:30 GMT. The one-minute candle lost 34 pips, or 0.50%, but the post-reaction caused a drop of 45 pips or 0.66%. In next hours the market recovered to continue fluctuating in the 67.8 area.
The Energy Information Administration released the US Crude Inventories data that came out higher-than-expected. Instead of the expected negative 2.8 million, the data came out only 1.4 million negative.
No data on Tuesday
The economic calendar has no releases that might influence the financial markets through the strength of the US Dollar. However, join the Visual JForex webinar and the Butterfly Set Ups webinar, respectively at 11:00 and 13:30 GMT to learn how to trade the macroeconomic data releases.
XAU/USD is calm after plunge
The yellow metal extended gains against the US Dollar on Monday, thus in total losing 2.00% since mid-Friday. This was caused primarily by the stronger US Dollar which gained on the growing crisis in Turkey. As a result, Gold was trading at a new 17-month low near 1,195.00 this morning, thus breaching the prevailing symmetrical triangle to the downside.
The pair is clearly oversold now. This should increase upside risks, as bulls would want to gain on this sudden daily plunge. Upside potential is apparent until a resistance cluster set by the 55-, 100– and 200-hour SMAs circa 1,210.00. In the unlikely event of a fall, Gold should target the monthly S2 at 1,180.00.
Hourly Chart
Strong bearish momentum has guided XAU/USD during the last months. This has resulted in Gold losing already 12.00% against the US Dollar.
The metal made an attempt to regain some ground last week. However, it failed and on Monday there were no longer support levels available to the bullion that could stop it from plunging further.
Daily Chart
Massive amount of long gold positions
73% of SWFX market traders are going long on the pair. However, the sentiment might change soon, as 56% of all trader set up orders are set to sell the metal.
OANDA traders are also bullish on the commodity with 82% of open positions being long today. Saxo Bank traders share the same sentiment with 66% long positions.
There are more than one conclusions, which can be made from the information. First, the larger brokerages with more long term players are more bullish on gold.
Second, the retail traders no longer have set up buy orders that would provide the needed momentum to push the commodity price higher in the near term future. Instead, sell orders are appearing.