- SWFX traders are 56% bearish
- 53% of pending orders in 1000-pip range are set to SELL gold
- Commodity trades above 1,330
- US GDP in focus
The yellow metal on Monday traded in the same range as on Friday. Namely, the metal's price traded near the 1,330.00 mark.
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.
US GDP on Friday
The yellow metal's fundamental traders are more concerned with the events occurring in the US government. The recent events surrounding the US government shutdown have pushed the US Dollar to a three year low level, forcing the commodity price to the recent high levels.
Although, macroeconomic release swing traders should look forward to this week. The US Advance GDP is set to be released at 13:30 GMT on Friday. This data release is most likely going to cause an increase of volatility.
XAU/USD still weak against US Dollar
The strong upside momentum that drove Gold on Friday morning reversed south near the 1,338.00 mark. This move was followed by a period of decline.
The yellow metal was stranded between the 55– and 100-hour SMAs for the most part; however, a strong hourly fall breached the former and left the rate testing the 200-hour SMA and the monthly R1 by the time of this analysis.
In terms of fundamentals, this support area is expected to hold unless a positive outcome regarding the US government shutdown results in a notably stronger US Dollar. On the other hand, the northern side is guarded by the 100-hour SMA and the weekly PP circa 1,334.00.
It is likely that the pair remains stranded between the aforementioned barriers until a breakout determines the pair's further direction.
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 bearish on Gold, as 56% of open positions are short. However, 56% of pending commands are set to buy the commodity.
OANDA traders are bearish, as 56% of open positions are short. In the meantime, SAXO bank traders are neutral.