- SWFX market sentiment is 73% bullish
- Pending orders in the 1000-pip range are set to sell in 60% of all cases
- US data will impact gold prices on Wednesday
Gold prices continued to surge on Tuesday until they met a resistance level at 1,195.00. The level forced the bullion to drop down to the 1,190.00 mark. Meanwhile, note that there was a strong sentiment against the US Dollar on all financial instruments.
On Monday, the Institute for Supply Management released the US ISM Manufacturing PMI data that came out lower-than-expected of 59.8, compare to forecasted 60.1.
Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management says: "Export orders expanded, but four major industries are no longer contributing. Price pressure continues, but the index softened for the fourth straight month and dropped below 70 for the first time since December 2017. Demand remains robust, but employment resources and supply chains continue to struggle, but to a lesser degree. "
Gold prices could be impacted by US macroeconomics
This week will be a busy one for macroeconomic data release traders. There will be notable data releases on Wednesday and Friday in the US that will impact the strength of the US Dollar and with it all of the currency pairs where it is involved.
On Wednesday, at 12:15 GMT the ADP Non-Farm Employment Change will be published. On the same day the ISM Non-Manufacturing PMI will be released at 14:00 GMT. Both data releases will be covered by Dukascopy Analytics on the bank's live webinar platform.
In addition, most macro release traders will be paying attention to the UK Services PMI data release on Wednesday. The data release will occur at 08:30 GMT on Wednesday, and it will also be covered on the bank's live webinar platform.
Meanwhile, all traders should note that on Friday at 12:30 GMT the US employment data sets like the Employment Change and Average Hourly Earnings will be published. By some financial media this event is seen as the most important of them all.
XAU/USD short term forecast
In regards to the near-term future, most likely, the monthly pivot point at the 1,195.43 mark together with the 200-hour simple moving average will retrace the gold to trade 1,190.00 mark during the day.
On the other hand, the 100-hour simple moving average might support the yellow metal to break the monthly PP and the 200-hour simple moving average to let the gold to trade at the 1,196.00 level on Tuesday.
Hourly Chart
On the daily chart traders should watch two notable technical levels. First is the 55-day simple moving average, which was approaching the commodity price from the upside at 1,204.15.
The second was the 61.80% Fibonacci retracement level, which is located at the 1,176.20 mark.
Daily Chart
Sentiment remains long
Traders continued to long the yellow metal, as 73% of all trader open positions were long on Tuesday.
Meanwhile, most trader set up pending orders are set to buy the metal by closing short positions or opening additional long positions. Namely, 55% of all trader set up orders are set to buy the metal under various conditions.
The fundamental events that have occurred during the last couple of weeks have not affected the opinion of short term traders on the Swiss Foreign Exchange. They continue to long the yellow metal.