- Market sentiment is 53% bearish
- 52% of pending orders in 1000-pip range are set to BUY gold
- A rebound is taking place
- Dominant resistance was passed
After the initial surge at the start of March, the bullion has started to trade sideways. However, after the experienced surge, it is assumed to be normal.
The ISM stated that the US Manufacturing PMI increased from 59.1 in January to 60.8 in February, representing the highest mark since May 2004. The US manufacturing activity strengthened in the reported month mainly due to expending exports that are showing their highest growth rate since April 2011.
In fact, growing employment rate also was one of the factors driving the overall expansion in the domestic manufacturing sector.
US data at the end of the week
Regarding this week most action is set to occur at the end of it. However, be sure to watch the various central bank rate announcements at the middle of the week.
Meanwhile, US labour data will be released with the ADP payrolls on Wednesday and official employment data will follow on Friday. These data releases will be covered by the Dukascopy research team on the bank's live webinar platform.
XAU/USD squeezed in
Despite surpassing the 200-hour SMA early on Monday, the yellow metal returned below this line several hours later to test the 55– and 100-hour SMAs located circa 1,318.00.
The pair was subsequently moving along the former, thus trading in a narrow range between this line and the 200-hour SMA by Tuesday morning.
Given that technical indicators are strongly bearish, this sentiment is expected to prevail in the market and thus push the rate for a test of the 38.20% Fibo retracement at 1,316.70.
Meanwhile, it is still possible that the pair still tries to test the upper boundary of the prevailing three-week channel down. In case the 200-hour is breached, gains should be capped near the weekly PP at 1,320.00.
Hourly Chart
The recently speculated new long term channel has been confirmed. However, a slight adjustment to the trend lines might be done.
Daily Chart
Markets short the metal
SWFX market sentiment on Tuesday was 53% bearish. Meanwhile, pending commands have become neutral.
OANDA traders have not changed their opinion, as 58% of open positions remain long. In addition, Saxo bank traders are going long in 54% of all cases.