- SWFX traders are 53% bearish
- 48% of pending commands are to buy the bullion
- The metal's price started the Wednesday's trading at 1,250.98
- Upcoming Events: FOMC Statement; Federal Funds Rate
The decline of the yellow metal continued on Wednesday. Moreover, it is most likely going to continue in the short term. Meanwhile, on the hourly chart one can spot that there is a hourly support level, which could slow down the fall of the commodity price. However, main focus will be on the US Federal Reserve, as the Federal Funds Rate announcement will occur in the second part of the day.
Monday's Markit survey showed that the preliminary PMIs for the US manufacturing and services sectors almost matched analysts' forecasts and had little initial impact on the USD/JPY currency pair. Just after the data were released, the US Dollar edged slightly higher against the Yen to 110.954. Markit revealed that the index for services activity in the United States came in at 54.2 in July, unchanged from the previous month, while the Manufacturing PMI rose to 53.2, above forecasts for a 52.3 reading. Sufficiently strong figures suggested that the country's pace of economic growth gained momentum, pointing to some signs for further expansion.
The US Federal Reserve
The main event will be created by the US Federal Reserve, which is set to make a rate announcement in the second half fof the day. At 18:00 GMT the FOMC Statement and the Federal Funds Rate will be released. However, the markets are not expecting the rate to be changed.
XAU/USD breaks pattern
The strength of the monthly pivot point has proven itself to be strong enough to force the yellow metal's price into breaking the ascending channel pattern, which guided the bullion since July 11. The commodity price has not only passed the support of the ascending channel, but also various other support levels. Among them are the 55 and 100-hour simple moving averages and the weekly PP. On Wednesday morning the yellow metal had passed one of the last support levels before setting out to plummet down below the 1,240 mark. However, the fall of the bullion might be stopped by the 200-hour SMA, which was located at the 1,241.25 level during the early hours of the day's trading session.
Hourly Chart
The daily chart reveals that the strong support level below the commodity price was passed on Wednesday morning. Due to that reason, on the daily chart it looks like the metal might fall as low as the 1,237.39 level.Daily Chart
SWFX traders remain almost neutral
Traders of Dukascopy are neutrally bearish, as 53% of open positions are short. Meanwhile, no longer there is a dominant proportion of trader set up pending orders to buy the metal. Instead only 51.67% of all pending SWFX commands are to buy the commodity.
OANDA Gold traders remain with a strong bullish outlook, as open positions are 63% long on Wednesday. In the meantime, SAXO bank sentiment is 53% bullish.