- SWFX traders are 54% bearish
- 66% of pending orders in 1000-pip range are set to BUY gold
- Commodity trades above support at 1,335
- Quiet Friday
The commodity price found support in the 200-hour SMA a couple of trading sessions ago. The resulting surge had extended itself on Friday. Namely, the metal's price had surged through other various resistance levels, and reached above the last level of significance to trade above the 1,335 mark. Due to this event, gold had a free range to surge up to the 1,350 level.
US homebuilding activity decreased more than anticipated by the end of 2017 to mark its largest drop in just a year, due to a steep fall in the single-family housing units construction.
Nothing at the end of the week
Friday will have no notable data being released, which might affect the financial markets through the strength of the US Dollar. Due to that reason technical analysis moves to the front of trading.
Although, traders should look forward to next week. The US Advance GDP is set to be released on Friday. This data release is going to cause an increase of volatility.
XAU/USD remains near breached channel
After breaching a six-week ascending channel late on Wednesday, Gold should have moved away from its bottom boundary.
However, despite efforts to edge lower on the following day, this fall was stopped by the 200-hour SMA near the 1,325.40 mark. The subsequent surge was also limited, as the northern side was restricted by the bottom channel line and the 55-hour SMA.
Technical indicators suggest that the pair should be tended northwards in this session. The bearish sentiment is still likely to prevail within the following hours, thus sending the rate towards 1,325.40. However, its previous failure to breach this area should repeat today, thus putting upwards pressure on Gold.
Possible points of resistance are the 100-hour SMA and a four-month high at 1,335.40 and 1,344.01, respectively.
Hourly Chart
In regards to the daily chart. It has revealed an important piece of information. The pair's recent surge stopped at the 1,345 mark because of a dominant resistance line.
A dominant trend line, which can be drawn by connecting November high levels was at fault. Moreover, by using this line to set a parallel one, a support line can be drawn. Most likely this line will be encountered in the upcoming months.
Daily Chart
Market sentiment on the bearish side
SWFX market sentiment is bullish on Gold, as 54% of open positions are short. However, 60% of pending commands are set to buy the commodity.
OANDA traders are bearish, as 52% of open positions are short. In the meantime, SAXO bank traders are 51% bearish.