© Dukascopy Bank SA
"I think there are too many long positions in the market. They are taking some profit."
- Lee Cheong Gold Dealers (based on CNBC)
Pair's Outlook
Unexpectedly high bets on rate increases from the US Federal Reserve later in the year pushed the yellow metal noticeably down against the American currency. The February uptrend was tested for the first time since early March and now the 20-day SMA and weekly S1 are at risk of being violated. A slump under the 1,230 level should expose the monthly pivot point at 1,205. Daily technical indicators are not signalling to the upside any more, while trading volume dipped to the lowest level since Feb 15. It may add to increased market volatility in the foreseeable future.
Traders' Sentiment
The negative gap between traders, who are looking for gold's downside tendency and those who are betting on an increase, narrowed to ten percent over the previous working day. This is down from 16 pp just after the weekend.
© Dukascopy Bank SA