- SWFX traders are 55% bearish
- 56% of pending orders in 1000-pip range are set to BUY gold
- Commodity trades just below 1,350.00 mark
- US GDP coming up on Friday
On Wednesday the long expected surge up to the 1,350 mark had resumed. In addition, the commodity price had reached above most notable resistance levels, and the 1,350 mark was about to be reached with ease.
US homebuilding activity decreased more than anticipated by the end of 2017 to mark its largest drop in just a year, due to a steep fall in the single-family housing units construction.
US GDP on Friday
The yellow metal's fundamental traders are mostly concerned with the events occurring in the US government. The recent events surrounding the US government shutdown have pushed the US Dollar to a three year low level, forcing the commodity price to the recent high levels.
Although, macroeconomic release swing traders should look forward to this week. The US Advance GDP is set to be released at 13:30 GMT on Friday. This data release is most likely going to cause an increase of volatility.
XAU/USD reaches four-month high
Bulls dominated the market on Tuesday, thus allowing the yellow metal to appreciate by 0.57%. The pair showed low volatility during this time, except for some hourly jumps in both directions.
From technical point of view, this surge resulted from the strong support of the 55-, 100– and 200-hour SMAs and the weekly PP circa 1,333.80, as bulls saw an opportunity to collect some gains.
By early Wednesday, Gold had reached the weekly R1 and the four-month high at 1,344.00. In addition, the upper boundary of the prevailing short-term pattern is also located nearby.
Even though technical indicators still show some upside potential, it is likely that the market introduces a slight correction southwards down to the aforementioned support. This area is expected to hold firmly.
Hourly Chart
In regards to the daily chart. It has revealed an important piece of information. The pair's recent surge stopped at the 1,345 mark because of a dominant resistance line.
A dominant trend line, which can be drawn by connecting November high levels was at fault. Moreover, by using this line to set a parallel one, a support line can be drawn. Most likely this line will be encountered in the upcoming months.
Daily Chart
Market sentiment on the bearish side
SWFX market sentiment is bearish on Gold, as 55% of open positions are short. However, 52% of pending commands are set to buy the commodity.
OANDA traders are bearish, as 53% of open positions are short. In the meantime, SAXO bank traders are also 52% bearish.