- Market sentiment is neutral
- 65% of pending orders in 1000-pip range are set to SELL gold
- The yellow metal's price has reached the 1,320mark
- Speeches and employment release
The Yellow metal has extended its decline on Thursday. However, the fall of the bullion had stopped just before reaching the 1,320 mark.
The US National Association of Realtors reported that in January the existing home sales slumped for the second month in a row. Contrary to economists' expectations for the number to have surged 0.9%, existing home sales declined 3.2% in the reported month.
It was the largest drop on year-to-year basis over the three-year period. Yet, the demand for housing is increasing due to the boosting labor market, which results as a shortage of buying opportunities for some potential first-time buyers.
Events that might surprise
By looking at what is left for this week in regards to data releases that might cause fluctuations, two events can be noticed. However, both of them could cause a reaction only if they significantly differ from the forecasts.
Namely, on Thursday watch out for the US Unemployment Claims at 13:30 GMT. On Friday watch the various FOMC member speeches, which are set to occur in the second part of the day. To be exact at 15:15 GMT Dudley speaks, at 18:30 GMT Mester gives a speech, and at 20:40 GMT Williams will express his views.
XAU/USD remains in junior pattern
After breaching the 200-hour SMA late on Tuesday, the yellow metal has since been moving lower. Wednesday's trading session, however, did not introduce significant changes, as the pair closed the day with a limited 0.35% decline. The FOMC meeting minutes introduced some upward volatility which was still more favourable for the US Dollar.
As apparent on the chart, the narrow junior channel has managed to confine the rate for the third consecutive session. A breakout is expected to occur today. Gold might still slide lower down to the weekly S1 or the 38.20% Fibo at 1,320.70 and 1,316.70, respectively.
However, the overall direction should nevertheless be north with gains being capped near the 55– and 200-hour SMAs, the monthly PP and the 23.60% Fibo in the 1,332.00/1,338.00 territory.
Hourly Chart
As apparent on the daily chart, the metal's price is trading in a long term ascending channel. The pair should form a new medium-term channel within its bounds; however, it might take some time for it to reveal itself.
Daily technical indicators were in favour of a possible fall this week. The forecast has become reality, as the metal's price has reached the lower trend line of the named long term channel up pattern at the 1,320 mark.
Daily Chart
Market sentiment is in neutral zone
SWFX market sentiment has become neutral. Meanwhile, all of the pending commands combined are also neutral.
OANDA traders are bearish, as 51% of open positions are short (-3%). Meanwhile, SAXO bank traders are bullish, as 51% of open positions are long.