- SWFX traders are 54% bearish (+2%)
- 57% of pending orders in 1000-pip range are set to SELL gold
- Metal fluctuates in range for second day
- No fundamentals in this session
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month.
The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
No fundamentals
No significant fundamentals are scheduled for today. Traders should turn their attention to the stock market.
XAU/USD returns to 55-hour SMA
As previously expected, the yellow metal was driven by upside risks on Thursday. The scope of this move, however, was not in line with the forecasts. After testing the monthly S1 at 1,309.92 for a brief period of time, the pair managed to reverse and push up to the 55-hour SMA and the weekly S1—area where it was trading early on Friday.
Technical indicators are neutral about the pair's possible direction in this session; the overall tendency, however, should remain north. If the aforementioned resistance area is breached, traders could expect a continuous appreciation towards the 23.60% Fibo and the 200-hour SMA near 1,338.00; meanwhile, losses are unlikely to exceed the 1,305.00 mark.
By and large, lack of fundamentals today might result in a period of consolidation.
Hourly Chart
The medium-term outlook points to a continuous decline. After hitting the 2017 high of 1,360.00, Gold is showing weakness against the Greenback. It is likely that the current movement south prevails until the 55- and 100-day SMAs and the 23.60% Fibo retracement near the 1,300.00 mark is reached sometime next week.
Daily Chart
Market sentiment on the bearish side
SWFX market sentiment is bearish on Gold, as 54% of open positions are short (+2%). Meanwhile, 57% of pending commands are once again to buy the commodity, compared to 68% to sell on the previous session.
OANDA traders are bearish, as 55% of open positions are short (+1%). Meanwhile, SAXO bank traders have turned bullish with 52% long positions (+2%).