- SWFX traders are 56% bearish
- 71% of pending orders in 1000-pip range are set to SELL gold
- Commodity price bounces between 1,335.00 and 1,350.00
- The Fed and first US employment releases
On Wednesday morning the yellow metal traded in a range between the 1,335.00 and 1,350.00 levels. This is highly likely to continue, as the metal's price consolidates in expectations of the publication of the Federal Funds Rate and the FOMC Statement.
The US economy revealed weaker-than-anticipated expansion pace in Q4, as solid consumer spending resulted in an increase in imports. The Commerce Department stated that the US gross domestic product rose at a 2.6% yearly rate in the December quarter, compared with 3.2% in the Q3, being restrained by an expanding trade deficit and moderate inventory accumulation.
Meanwhile, durable goods orders rose 2.8% in December, with the US manufacturers benefiting from a solid global growth and a weaker currency, supporting the country's exports.
Payrolls and the Fed
Wednesday is set to be the top day for fundamental event traders of the US Dollar on all the financial instruments that involve the Buck.
First will be the ADP Non-Farm Employment Change at 13:15 GMT. The release will be covered on the bank's webinar platform live. Join by clicking on the notification on the JForex platform or find the webinars in the TV section.
However, later on in the day a more important event is set to take place. Namely the US FOMC Statement and the Federal Funds Rate are set to be published at 19:00 GMT. No large surprises are expected from the publication. However, prior to that the market might trade sideways.
XAU/USD re-tests 55-hour SMA
Even though the yellow metal managed to shoot up during the first half of Tuesday, the combined resistance of the 55-hour SMA, the weekly PP and the bottom boundary of the breached two-month channel up proved to be an unbreakable barrier which sent the pair down to 1,336.80.
The rate has since returned back to the 55-hour SMA which is now likewise reinforced by the 200-hour SMA. It should edge slightly higher in this session towards the prevailing short-term channel down circa 1,345.00.
The upside target in this case could be the weekly PP and the 100-hour SMA near 1,348.30.
By and large, several noteworthy fundamentals which could shake the market are to be released today. In case of a negative surprise, Gold should be supported by the weekly S1 and the monthly R2 at 1,329.00.
Hourly Chart
The medium term narrow ranged channel up pattern of the yellow metal has been broken. The pattern was broken, as the metal's price began to consolidate.
In general, the markets will first want to see what the Fed reveals and only then long term patterns can be drawn on the daily chart.
Daily Chart
Market sentiment on the bearish side
SWFX market sentiment is bearish on Gold, as 56% of open positions are short. However, 55% of pending commands are set to buy the commodity.
OANDA traders are bearish, as 58% of open positions are short. In the meantime, SAXO bank traders are 54% bearish.