- SWFX market sentiment 57% short
- Pending orders in the 1000-pip range are set to buy in 55% of cases
- Gold has found support in the 200-hour SMA
On Tuesday morning the yellow metal found support in the 200-hour simple moving average at the 1,282.00 level. The SMA managed to force the commodity price into fluctuating horizontally.
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 key highlight from the official statement, "Fed raises target interest rate to 2.25-2.50 pct, reduces expected hikes for 2019 to two from three."
Canadian events take most attention
There are notable macroeconomic and monetary events taking place this week that are scheduled to be covered by Dukascopy and are expected to cause fluctuations in the Forex market.First up on Tuesday the Canadian Trade Balance will be published at 13:30 GMT. The event is expected to cause a bounce from 10 to 35 base points.
Afterwards, Wednesday will be the busiest day of the week for macroeconomics. At 15:00 GMT the Bank of Canada will publish its Overnight Rate. The bank is set to hike their interest rate from 1.75% to 2.00%. Due to that reason the USD/CAD is expected to fall at least 50 base points.
Afterwards, take into account that the big once per week move on oil due to US Crude Oil Inventories is scheduled to occur at 15:30 GMT. During the past month oil prices bounced from 40 to 80 cents per barrel on the announcement.
The busy day will end with the FOMC Meeting Minutes publication at 19:00 GMT. During the event the market usually does not fluctuate. However, surprises are possible.
Last but not least will be the releases 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 Tuesday morning hours, the yellow metal slumped by 1263 pips or 0.98% to trade at the 1,282.00 level. Note, the 200-hour simple moving average supported the gold from the fall at the 1281.89 mark.
In regards to the near-term future, most likely, the 200-hour simple moving average will continue to support the yellow metal to push the gold to trade up towards the 23.60 % Fibonacci retracement level at the 1,291.57 mark.
Although, on its way there the commodity will encounter the resistance of the 55 and 100-hour simple moving averages, which on Tuesday were located just above the 1,288.00 level.
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. That sentiment has gradually become short.
In the meantime, trader pending orders in the 1000-base point range were set to buy the metal in 58% of cases.
The buy orders are the take profits and stop losses of the short positions.