- SWFX traders are 55% bullish
- 59% of pending orders in 500-pip range are set to SELL the gold
- Pair rebounds from weekly R2 at 1,294.86
- Upcoming Events: FOMC Meeting Minutes
Continuous escalation of the North Korean crisis drove the pair towards the weekly R2 at 1,294.86 yesterday. However, as soon as traders started to anticipate minutes of the Fed, the rate changed the direction and started slowly slipping to the bottom. Before the release, the gold is not expected to make major moves against the gold, as the southern side remains protected by combined support level.
The Labour Department showed that the US job market faced unexpected decrease in jobs, as the economy lost 33K positions in September, reflecting the impact of Hurricanes Harvey and Irma. However, the unemployment rate declined to a new low of 4.2% in the same period. Following the report, market expectations for the Federal Reserve to raise rates in December were still high.
Fed Meeting Minutes
The key event of the day that is likely to notably affect valuation of the Dollar is the FOMC Meeting Minutes, which will happen at 18:00 GMT. During this release, traders expect to get better understating of the Fed plans about interest rate hike in December.
XAU/USD awaits Fed decision
In result of the previous trading session, traders with bullish outlook pushed the pair simultaneously from larger descending and minor ascending channels. The surge was based on increasing tensions between the US and North Korea. However, near the weekly R2 at 1,294.86 it made a rebound, as markets started to worry about the upcoming Fed Meeting Minutes. Given the importance of this event, the pair is expected to move horizontally until 18:00 GMT. Fortunately for the gold, the southern side is protected by a combined support set up by the weekly R1 at 1,285.75 and the 55-hour SMA. If signals from the Fed will be hawkish, the rate most probably is going to fall to an intersection of the 100-, 200-hour SMAs and the 61.8% Fibonacci retracement level near 1,278.90.
Hourly Chart
On daily chart, the pair is about the test a combined resistance formed by the 1,294.86 and the 55-day SMA. If the Fed keeps a hawkish outlook about future interest rate hike, the pair most probably is going to make a rebound. On the other hand, there is a need to take into account continuous concerns over the North Korean crisis that drags the price of gold to the top.Daily Chart
Markets sentiment remains neutrally bullish
Traders of Dukascopy are bullish on valuation of the gold, as 55% of open positions are long. In the meantime, 55% of pending commands are to buy the commodity.
OANDA traders are bullish, as 69% (-2%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 61% (+1%) of open positions are also long.