- SWFX market sentiment is 58% short
- Pending orders in the 1000-pip range are set to buy in 63% of cases
- A jump and reveal of new pattern was caused by FOMC
The yellow metal jumped in a range of twenty USD during the last twenty four hours. The move was caused by the weakness of the US Dollar. Namely, the US Federal Reserve various speakers and official meeting minutes revealed that they do not intend to continue with their policy of making the US Dollar less available throughout various methods.
Latest Notable Fundamental Event
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The meeting summary stated, "With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier."
US CPI will end the week on Friday
UK GDP and Manufacturing Production are expected to cause a 20 pip move at 09:30 GMT.At 13:30 GMT the US CPI and Core CPI data sets might cause a 10-30 pip move.
XAU/USD short term forecast
During Wednesday's trading session, the gold broke most of the technical indicators to trade above the 23.60% Fibonacci retracement level at the 1,292.86 mark.
It is expected that the 23.60% Fibonacci retracement level at the 1,292.86 mark will give additional support for the gold to appreciate against the US Dollar. Most likely, the yellow metal will trade near the upper boundary of the ascending dominant pattern line at the 1,300.00 mark.
On the other hand, the yellow metal could depreciate against the US Dollar to pass through the support levels of the simple moving averages to trade near the bottom boundary of the ascending medium pattern line at the 1,284.00 mark.
Hourly Chart
The daily chart's patterns are broken. The metal has extended its gains far beyond expectations.In addition, note that the simple moving averages are now located far below the commodity price. Most likely a retracement downwards will occur in the near term future.
Daily Chart
Traders short the metal
Since Monday, 58% of trader open gold positions were short. Last year traders were massively long.
In the meantime, trader pending orders in the 1000-base point range were set to buy the metal in 64% of cases. Previously, 56% of orders were set to buy.
The growth of the buy orders indicates that there are traders, which intend to open long positions and with it push the metal higher.