- Market sentiment has become 53% bearish
- 56% of pending orders in 1000-pip range are set to SELL gold
- Metal's price fails to pass dominant resistance
- A decline is occurring following the encounter of resistance
After the encounter of the upper trend line of the dominant channel down pattern the yellow metal's price has declined. On Wednesday morning the commodity price had already reached the 1,340 mark.
The Conference Board revealed weaker consumer confidence on Tuesday, but that was not enough to cause a significant move in the observed currency pairs. The United States CB reported a positive result of 127.7 points, still below expectations, following a downwardly revised data in the previous period.
March's figure reflected the fewer amount of responses showing expectations for higher incomes, better business conditions and more available positions in the following six months.
Watch out for US GDP release
Although the US and Chinese trade issues continue to trouble the markets via the strength of the US Dollar, which is highly affected by most news that surround the issue of global trade, there is a notable fundamental macroeconomic release set to occur on Wednesday.
Namely, the release of the US Final GDP is set to occur at 12:30 GMT. However, the final release of the GDP data is not usually causing large fluctuations as the initial release of the GDP.
The data release is set to occur during the Wednesday's research webinar of the Dukascopy Analytics team on the bank's webinar platform. Due to that tune in already before 12:00 GMT, as at that time the webinar is scheduled to start.
XAU/USD reverses
XAU/USD did not introduce any surprises during Tuesday's trading session. The pair bounced off the upper boundary of a three-month channel and the monthly R1 near 1,355.00 prior to breaching the short-term channel and the 55-hour SMA.
Gold managed to recover some of the losses during the Asian session, but nevertheless remained supported by the 100-hour SMA.
Some downside potential still exists in the market. Thus, the yellow metal might still target the 23.60% Fibo retracement at 1,335.00. However, it is likely that the current bearish momentum does not prevail long in the market, thus allowing bulls to take control soon.
In terms of upside potential, the aforementioned channel line should be strong enough to prevent further advances.
Hourly Chart
More developments to be noted have taken place on the daily chart. Namely, the upper trend line of the dominant almost horizontal channel down pattern has been touched.
However, as it could have been expected, the channel's resistance has held its ground and forced the metal's price into a retreat, which has resulted in the passing of various support levels.
Daily Chart
SWFX traders remain bearish
SWFX market sentiment remains bearish, as on Wednesday 54% of traders were short. Meanwhile, pending commands have become slightly bullish, as 54% of all set up orders were to buy.
OANDA traders are also bearish, as 57% of open positions were short. In addition, Saxo bank traders are going short in 55% of all cases.