- Market sentiment is neutral
- 60% of pending orders in 1000-pip range are set to SELL gold
- Once more the Bullion approaches the 1,320 mark
- Watch the Federal Reserve
The early hours of Wednesday experienced the bullion breaking one resistance level after another, as the various SMAs and a Fibonacci retracement level where passed. Although, the yellow metal's price was still set to meet with the resistance of the 200-hour SMA near the 1,319 mark. Moreover, a beat down of the price might occur during the hike of the Federal Funds rate, which is set to occur at 18:00 GMT.
The US Census Bureau revealed on Friday that the US building permits data did not meet expectations, showing the growth pace of only 1.30M units in February, following the downwardly revised 1.38M reading in the prior month.
The stronger-than-expected fall in the US homebuilding was caused by a plunge in the multi-family housing construction offsetting a rise in single-family projects for the second month in succession.
First rate hike incoming
The day has come. Jerome Powell is set to hike the US interest rates at 18:00 GMT. However, there is a larger change occurring in the Federal Reserve, which might get even more attention.
Namely, the head of the Fed is set to host a conference after the rate announcement, which is expected to have a similar format to the ECB press conferences that follow the European rate announcements. However, the exact format is still set to be seen.
XAU/USD moving towards 1,320
Gold was generally bearish against the US Dollar on Tuesday even though it managed to regain some of the lost positions by Wednesday morning. The pair's fall during the first part of the day was stopped by a trend-line at 1,310.00 which allowed to re-acquire its position above the 55-hour SMA.
The apparent upside potential until the 1,320.00 area could be realised during the first part of the day; however, an uneventful period of consolidation is as likely prior to the FOMC statement at 1800GMT.
This fundamental release is very likely to introduce volatility in the market and even direct the rate's subsequent movement.
Gains should be capped at 1,324.00, while the 50.0% Fibonacci retracement is expected to provide an unbreakable support.
Hourly Chart
However, on the daily chart it looks more like the pair is encountering a medium term resistance line, which is forcing the commodity price into a retest of the now active long term almost horizontal descending channel pattern.
However, just above the mentioned pattern's support line are located additional levels of significance. Namely, the weekly S1 is providing support at 1,306.17 and the 100-day SMA is approaching from the downside near the 1,305 mark.
Daily Chart
Markets short the metal
SWFX market participants no longer have a collective opinion, as traders are neutral. Meanwhile, pending commands have become slightly bullish, as 52% of all set up orders were to buy.
OANDA traders remain slightly bullish, as 57% of open positions were long on Wednesday. In addition, Saxo bank traders are going long in 51% of all cases.