- SWFX market sentiment 57% short
- Pending orders in the 1000-pip range are set to buy in 56% of cases
- The metal has passed the 200-hour SMA's support
The support provided by the 200-hour simple moving average has been passed. The metal is expected to decline. On the Dukascopy Analytics hourly chart the rate has no support as low as the 1,270.00 level.
Latest Notable Fundamental Event
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The key highlight from the official statement, "Fed raises target interest rate to 2.25-2.50 pct, reduces expected hikes for 2019 to two from three."
Central Bank events incoming on Wednesday
There are notable macroeconomic and monetary events taking place this week that are scheduled to be covered by Dukascopy and are expected to cause fluctuations in the Forex market.Wednesday will be the busiest day of the week for macroeconomics. At 15:00 GMT the Bank of Canada will publish its Overnight Rate. The bank is set to hike their interest rate from 1.75% to 2.00%. Due to that reason the USD/CAD is expected to fall at least 50 base points.
Afterwards, take into account that the big once per week move on oil due to US Crude Oil Inventories is scheduled to occur at 15:30 GMT. During the past month oil prices bounced from 40 to 80 cents per barrel on the announcement.
The busy day will end with the FOMC Meeting Minutes publication at 19:00 GMT. During the event the market usually does not fluctuate. However, surprises are possible.
Last but not least will be the releases on Friday. UK GDP and Manufacturing Production are expected to cause a 20 pip move at 09:30 GMT. At 13:30 GMT the US CPI and Core CPI data sets might cause a 10-30 pip move.
XAU/USD short term forecast
During Wednesday morning hours, the yellow metal was resisted by the 200-hour simple moving average to push the gold to the 1,283.23 mark.
Most likely, the XAU/USD will be trading below the resistance level of the 200-hour simple moving average at the 1,275.00 level during the trading session.
However, the gold might appreciate against the US Dollar during today's US FOMC Meeting Minutes at 19:00 GMT to push the yellow metal to break through the resistance level.
Hourly Chart
The daily chart's patterns are broken. The metal has extended its gains far beyond expectations.In addition, note that the simple moving averages are now located far below the commodity price. Most likely a retracement downwards will occur in the near term future.
Daily Chart
Traders short the metal
Since Monday, 58% of trader open gold positions were short. Last year traders were massively long. That sentiment has gradually become short.
In the meantime, trader pending orders in the 1000-base point range were set to buy the metal in 56% of cases.
The buy orders are the take profits and stop losses of the short positions.