- SWFX traders are 52% bullish
- 65% of pending orders in 500-pip range are set to BUY the gold
- Pair trades above moving averages
- Upcoming Events: New Fed Chair announcement, Unemployment Claims, Prelim Nonfarm Productivity, Prelim Unit Labor Costs
Anticipation of the new Fed Chair pick led to short-term appreciation of the bullion againstthe buck. As a result, the pair has formed and already broke from the rising wedge formation. Nevertheless, an accumulation of multiple moving averages is expected to halt the downfall at least until announcement of the new Fed Chair.
The Federal Reserve announced that it kept key interest rates unchanged and pointed to strong US economic expansion and better labour market conditions, as recent hurricanes had only short-term impact on economic activity. The Bank's policymakers kept their encouraging stance, when acknowledging that consumer price growth was still soft, but did not lowered their evaluations of pricing expectations.
Powell v Taylor
During this trading session the US President Donald Trump is expected to announce the new Fed Chair. Majority of investors are convinced that Mrs Yellen's successor will be Professor Taylor. In the meantime, many news outlets reported that Governor Powell has a better chance to hold this position. In any case, this decision is expected to cause active price movement in the markets.
XAU/USD forms rising wedge pattern
The Fed Monetary Policy Statement, indicating on the upcoming interest rate hike, led to short-term appreciation of the yellow metal against the buck. From technical point of view, the pair formed a rising wedge pattern, which is expected to be broken to the south during this trading session. However, even then the buck is unlikely to reach the bottom trend-line of a dominant, long-term ascending channel. Such assumption is partially based on a combined support formed by the 55-, 100-, 200-hour SMAs together with the weekly PP, which are likely to restrain the fall of the rate, and partially on the fact that the pair is simultaneously moving in new junior ascending channel, which already consists of four confirmation points. However, an announcement of the new Fed Chair might create a necessary momentum to push the rate through all these barriers.
Hourly Chart
On daily chart the pair continues to fluctuate near the 100-day SMA and the 61.8% Fibonacci retracement level. For now, this combined resistance proved to be strong enough to force the pair to stop the pair from breaking to the top.
Daily Chart
Markets sentiment remain bullish
Traders of Dukascopy are neutrally bullish on valuation of the gold, as 52% of open positions are long. Accordingly, 52% of pending commands are to buy the commodity.
OANDA traders are bullish, as 70% (+1%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 56% (-2%) of open positions are long.