- SWFX traders are 55% bearish
- 56% of pending orders in 1000-pip range are set to BUY the gold
- Signifficant support near 1,300.00
- Upcoming Events: Federal Funds Rate, FOMC Press Conference
Yesterday the pair did not make an attemp to test a signifficant suppor, which is located at the 1,300.00 level. Instead, it took the opposite direction and now is heading towards the guiding descending channel's upper trend-line that is backed up by the 100-hour SMA. In shor run, this barier is likely to stop recovery of the gold. However, the eventual outcome will greatly depend on the Fed's decision.
The Commerce Department revealed that the US building permits rose to the strongest level in seven months over the course of August with the total number of 1.30M permits issued. The property market was moving ahead before an expected transitory hit from Hurricanes Irma and Harvey. Though, the number of permits in damaged areas was not significantly weaker, housing could stay a drag on the US economy in the third quarter.
Event of the day: FOMC Press Conference
Today all eyes of traders are on the US Federal Open Market Committee, which is expected to share its economic projections for inflation and evaluate economic growth as well as to make a statement about the Federal Funds Rate at 18:00 GMT. This event is expected to cause high but short term volatility in the market, which creates a great opportunity for swing traders.
XAU/USD makes premature rebound
Contrary to expectations, the pair did not try to test a strong support level near the 1,300.00 mark. In contrast, it made a premature turn-around and bypassed the weekly S1 at 1,310.77 as well as the 55-hour SMA. Such outcome suggests that at least first half of this trading day the gold might spend in further advance against the buck. However, it is unlikely that the pair will manage to break through the upper trend-line of a guiding descending channel that is additionally backed up by the 100-hour SMA. This assumption is also supported by the general picture on a daily chart. However, there is a need to notice that the eventual outcome will greatly depend on decision and comments made by the Federal Reserve later this day.
Hourly Chart
At the moment, the pair is still fluctuating in a junior descending channel that represents a part of a larger channel up. From technical perspective, it seems that the pair is about to make a third reaction low. However, this scenario might be altered because of reaction on the FOMC press conference.Daily Chart
Markets sentiment remains bearish
Traders of Dukascopy remain bearish on the price of gold, as 55% of open positions are short. In the meantime, 55% of pending commands are to buy the commodity.
OANDA Gold traders remain neutrally bullish, as open positions are 57% long. In the meantime, SAXO bank traders are neutral, as 54% of open positions are also long.