- SWFX market sentiment is 70% bullish
- 53% of pending orders in 1000-pip range are set to SELL Gold
- Crude Oil Inventories in focus
On Wednesday morning, it could be observed that the yellow metal's price traded between various SMA's in the zone between 1,211 and 1,217.
The US Federal Reserve announcement Interest Rates that came in line with expectation of <2.00% and the actual rate of <2.00%.
James McCann, senior global economist at Aberdeen Standard Investments says: The Fed "has already attracted the ire of the president for raising rates. This political interference is clearly unhelpful but may return as September approaches. I can't see Trump's tweets making [Fed Chairman Jerome] Powell change his course but it will be a test of his mettle to navigate the minefield of questions he'll inevitably get."
Oil data will be in focus
No data releases on Wednesday will influence the price of gold through the strength of the US Dollar.
Although, data release traders are most likely going to be concentrating on the release of the US Crude Oil Inventories data release. The reason for that is that the data set has been creating increases of volatility constantly throughout this summer.
The data release will be covered by the Dukascopy Analytics team on the bank's live webinar platform. The data coverage will begin at 14:20 GMT.
XAU/USD enters between strong levels
XAU/USD has been diminishing its trading range for the last three sessions. This has left the rate in a triangle-like formation between a channel line and a trend-line.
Gold breached the 55– and 100-hour SMAs and the aforementioned channel early on Wednesday. However, it is unlikely that a surge could follow today, as a strong resistance level is formed by the 200-hour and 55-period (4H) SMAs near 1,220.00. Likewise, technical indicators flash bearish signals for the pair today.
It seems that the 55– and 100-hour SMAs at 1,210.00 could surrender, thus sending the rate lower down to the monthly S1 at 1,202.00.
Hourly Chart
Strong bearish momentum has guided XAU/USD during the last three months. This has resulted in Gold losing 10.80% against the US Dollar.
The given move has sent technical indicators in the strongly oversold territory. Despite being there for a couple of sessions, the rate has yet failed to regain its losses.
Appreciation should nevertheless follow, as bears may soon lack the necessary momentum to push Gold lower. The nearest resistance is a two-week trend-line and the monthly PP at 1,235.00. A breakout from this cluster would create the way for a test of the 55-day SMA located near 1,256.00 on Wednesday.
Daily Chart
Massive amount of long gold positions
70% of SWFX market traders are going long on the pair. The number of pending orders shows the same bullish tendency, as 56% of set up orders are to buy. Previously, 54% of orders were to buy.
OANDA traders are also bullish on the commodity with 83% of open positions being long today. Saxo Bank traders share the same sentiment with 71% long positions.
There are more than one deductions, which can be made from the information.
First, the larger brokerages with more long term players are more bullish on gold.
Second, the retail traders have set up orders to open even more long positions in case the bullion rebounds and surges.