- SWFX market sentiment is 70% bullish
- Pending orders in the 1000-pip range are set to sell in 53% of all cases
- US data will impact gold prices on Wednesday
Gold jumped on Tuesday and reached the upper trend line of a pattern above 1,205.00 level earlier than it was expected. Meanwhile, on Wednesday the commodity was expected to decline, but it traded mostly neutrally.
On Monday, the Institute for Supply Management released the US ISM Manufacturing PMI data that came out lower-than-expected of 59.8, compare to forecasted 60.1.
Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management says: "Export orders expanded, but four major industries are no longer contributing. Price pressure continues, but the index softened for the fourth straight month and dropped below 70 for the first time since December 2017. Demand remains robust, but employment resources and supply chains continue to struggle, but to a lesser degree. "
Gold prices could be impacted by US macroeconomics
This week will be a busy one for macroeconomic data release traders. There will be notable data releases on Wednesday and Friday in the US that will impact the strength of the US Dollar and with it all of the currency pairs where it is involved.
On Wednesday, at 12:15 GMT the ADP Non-Farm Employment Change will be published. On the same day the ISM Non-Manufacturing PMI will be released at 14:00 GMT. Both data releases will be covered by Dukascopy Analytics on the bank's live webinar platform.
Meanwhile, all traders should note that on Friday at 12:30 GMT the US employment data sets like the Employment Change and Average Hourly Earnings will be published. By some financial media this event is seen as the most important of them all.
XAU/USD short term forecast
In regards to the near-term future, most likely, the yellow metal will trade sideways during the trading session. The simple moving averages will try to catch up the rate to support to in next trading sessions.
On the other hand, today's fundamental news could affect the gold to break the medium descending pattern to trade near the monthly R1 at the 1,209.98 mark.
Hourly Chart
On the daily chart it can be noted that the 55-day simple moving average was playing a crucial role in the last trading session, as the metal's price reached for the 1,210.00 level. It slowed down the surge of the metal.
Meanwhile, note that the commodity price has not properly touched the upper trend line of a dominant descending pattern, which should force the commodity into a couple of month long decline.
Daily Chart
Sentiment remains long
Traders continued to long the yellow metal, as 70% of all trader open positions were long on Wednesday. Although, previously 74% of traders were long.
Meanwhile, most trader set up pending orders are set to buy the metal by closing short positions or opening additional long positions. Namely, 61% of all trader set up orders are set to buy the metal under various conditions.
The fundamental events that have occurred during the last couple of weeks have not affected the opinion of short term traders on the Swiss Foreign Exchange. They continue to long the yellow metal.