- SWFX traders are 52% bearish (-4%)
- 68% of pending orders in 1000-pip range are set to SELL gold
- Metal faces notable support level at 1,310.00
- Upcoming events: US Unemployment Claims
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month.
The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
Quiet session
The only fundamental event scheduled for this session is the weekly Unemployment Claims published by the US Department of Labour at 1330GMT.
XAU/USD allays near monthly S1
Downside risks were dominating over the XAU/USD exchange rate on Thursday. After failing to move above the 1,330.00 mark mid-session, the yellow metal started to gain bearish momentum until the monthly S1 at 1,309.92 was reached this morning.
Given that the pair remained near the 38.20% Fibo retracement line today, it is likely that a bullish reversal towards the 23.60% line occurs. This area is also reinforced by the 55–, 100– and 200-hour SMAs and the monthly PP in the 1,330.00/1,338.10 range.
Technical indicators are likewise supportive of this scenario, as they signal that a movement upwards should be due soon. On the other hand, a slight period of depreciation down to 1,300.00 should not be discarded.
Hourly Chart
The medium-term outlook points to a continuous decline. After hitting the 2017 high of 1,360.00, Gold is showing weakness against the Greenback. It is likely that the current movement south prevails until the 55- and 100-day SMAs and the 23.60% Fibo retracement near the 1,300.00 mark is reached sometime next week.
Daily Chart
Market sentiment on the bearish side
SWFX market sentiment is bearish on Gold, as 52% of open positions are short (-4%). In addition, 68% of pending commands are now set to sell the commodity, compared to 53% to buy on the previous session.
OANDA traders are bearish, as 56% of open positions are short (-3%). Meanwhile, SAXO bank traders have turned bullish with 54% long positions.