XAU/USD tries to break above 55-day SMA

Source: Dukascopy Bank SA
  • SWFX traders are 55% bullish
  • 57% of pending orders in 500-pip range are set to BUY the gold
  • Pair tests 55-day SMA
  • Upcoming Events: US PPI, Unemployment Claims, Crude Oil Inventories

Due to uncertainty expressed by some of the FOMC members, the yellow metal continued to gain value against the buck. At the moment, nothing prevents the rate from continuing to head to the top except for a combined resistance formed by the weekly R2 and the 55-day SMA. Another factor that might force the pair to turnaround is the US PPI release at 12:30 GMT.

The JOLTS survey showed that the number of the US job openings declined to 6.08M in August, from a downwardly revised figure of 6.14M in the prior month, facing negative impacts coming from the Hurricane Harvey. Subsequent release of the Fed meeting minutes revealed that some central bankers remained concerned on persistently weak inflation growth, which is likely to determine the need of the interest rate hike.

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US PPI



The key event of the day for given pair will happen at 12:30 GMT when the Bureau of Labor Statistics will release an information about the US PPI plus the number of unemployment claims. Other events, such as Governors Brainard or Powell speeches are unlikely to cause notable volatility in the markets.



XAU/USD trades at 1,294.86

In line with expectations, the pair continued to move in a limbo between the weekly R1 and R2 in anticipation of release of the FOMC meeting minutes. As soon as it became clear that there remains some uncertainty about the upcoming interest rate hike, the buck started to lose value against the gold. As a result, the rate reached and even slightly overstepped the 1,294.86 mark. Accordingly, the pair is likely to continue the surge at least in the first half of the day before the US PPI data release. This assumption is partially based on the 55-hour SMA, which is rising together with the pair, and partially on two recently formed ascending channels. However, the fact that an area near 1,295.50 is blocked by the 55-day SMA suggests that the rate might be actually forced to turnaround.

Hourly Chart

On daily chart, the pair is testing a combined resistance formed by the 1,294.86 and the 55-day SMA. A number of technical indicators suggest that the rate is likely to break through it. However, there is also a need to take into account an effect from release of the US macroeconomic data, which might lead to appreciation of the buck.

Daily Chart



Markets sentiment remains neutrally bullish

Traders of Dukascopy are bullish on valuation of the gold, as 55% of open positions are long. In the meantime, 55% of pending commands are to buy the commodity.

OANDA traders are bullish, as 71% (+2%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 57% (-4%) of open positions are also long.


Spreads (avg, pip) / Trading volume / Volatility

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