- SWFX market sentiment is 67% bullish
- Pending orders in the 1000-pip range are set to buy in 59%% of cases
- Gold retraces downwards
The yellow metal remains in the borders of an ascending pattern. On Tuesday, the metal tested the upper trend line of the pattern, but eventually after another attempt on Wednesday it declined below the 1,250.00 level.
Latest Fundamental Event
The oil price has depreciated after the US Crude Oil Inventories data release last Wednesday at 15:30 GMT. The one-minute candle lost 26 pips, or 0.50% right after the data release. In the next minutes, the rate was trading at the 52.40 level against the US Dollar.
The Energy Information Administration released the US Crude Inventories data that came out better-than-expected of negative 1.2M, compare to forecasted negative 3.0M.
Andrew Lipow, the President of Lipow Oil Associates in Houston said, "The market is disappointed that the EIA did not confirm the 10 million-barrel crude oil inventory draw we saw in the API statistics yesterday and as a result the crude oil price has come off,".
Busy second half of the week for data traders
On Wednesday, at 19:00 GMT the event of the week will take place. Namely, the FOMC Statement and the Federal Funds Rate will be published. The Federal Reserve is expected to hike the US central banks interest rate to 2.5% from 2.25%.In theory the event is expected to cause a US Dollar surge, which would beat the top pairs downwards. This year the interest rate hikes have caused moves of at least 40 base points.
On Thursday, all attention will be paid to events in the UK. Namely, at 09:30 GMT the UK Retail Sales are expected to cause a move from 10 to 40 pips.
Afterwards, the Bank of England will announce their rate decision. The event has caused moves from 26 to 97 pips since May 2018.
On Friday the data releases will continue. During the morning hours, namely, at 09:30 GMT the UK Current Account will be published. This event causes moves from 15 to 45 pips.
The week's data will end at 13:30 GMT. At that time the Canadian Retail Sales and GDP data will be published. Simultaneously the US Durable Goods data sets and Final GDP will be released.
The last event is too complex to explain it shortly. Instead, state your questions at the weekly Monday's economic calendar stream at 12:00 GMT.
The above mentioned data release will be covered by Dukascopy Analytics. The event can be watched on our YouTube channel.
XAU/USD short term forecast
During Wednesday's morning hours, the yellow metal kept trading upwards to stay near the resistance level of the ascending small pattern line at 1,252.00 level.
It is expected that the rate will continue trading upwards to reach the 1,254.00 level during the trading day. Note, none of the technical indicators could prevent the gold from the surge.
However, during today's US FOMC meetings at 19:00 GMT, the US Dollar could appreciate against the yellow metal to push the rate to trade downside towards the 38.20% Fibonacci retracement level at the 1,245.07 mark.
Hourly Chart
On the daily chart the commodity price is preparing to test the resistance of the 200-day simple moving average at the 1,253.50 level.Meanwhile, since Tuesday the commodity price was being supported by the 38.20% Fibonacci retracement level at the 1,245.07.
Daily Chart
Neutral set up trader orders
Traders have continued to close long gold positions, as by the middle of Wednesday 67% of traders on the Swiss Foreign Exchange were long on the yellow metal.
In the meantime, trader pending orders in the 1000-base point range were no longer neutral, as on Tuesday, namely the 58% of trader orders were set to buy.
Profits have been taken during the recent decline. Meanwhile, traders are prepared to reopen them to continue taking advantage of the surge.