- SWFX traders are 51% bearish
- 59% of pending orders in 500-pip range are set to SELL the gold
- Gold price resumes the surge towards 1,316.00
- Upcoming events: ADP Non-Farm Employment Change, Unemployment Change, Crude Oil Inventories
After bouncing off from the 1,305.00 level the yellow metal resumed the surge against the buck, similarly to the Euro. Accordingly, today the pair is expected to test the weekly R1 at 1,316.03 and then the resistance zone located slightly above the 1,320.00 mark.
The US factory growth accelerated more than projected by the end of 2017, fuelled by stronger new orders' growth, indicating solid economic momentum in the period. The Institute for Supply Management stated that its Manufacturing PMI grew to 59.7 in the reported month, suggesting expansion in the sector. In the following FOMS meeting minutes report, the Fed policymakers indicated that further rate increases would be guided by fiscal stimulus, consumer inflation.
American labour market
Even though at 13:15 GMT the ADP will release its estimate on change in the American labour market, this event is not expected to arouse great interest among market participants. For this reason, it would be better to take a break until tomorrow's official release.
XAU/USD forms junior channel down
During the early hours of new trading session the yellow metal continued to lose value against the buck in a junior descending channel. Basically, the consolidation period might last until the exchange rate will hit the support line of a four-week long ascending channel. A deep plunge below that barrier seems unlikely due to additional support provided by the rising 200-hour SMA as well as the 50% Fibonacci retracement level located at 1,297.00. So, unless the buck gains a momentum from some fundamental event, such as tomorrow's employment data release, the bullion is likely to test the 1,320.00 level one more time. An allocation of pending orders as well as some technical indicators supports this assumption.
Hourly Chart
Daily chart suggests that over the last four months the exchange rate has been fluctuating in a descending channel that represents a part of a dominant channel up. If this assumption is true, then the yellow metal should start losing value against the buck at least until the pair hits one of the rising moving averages. However, if the back fails to gain a momentum, the gold traders might use the 61.8% Fibonacci retracement level at 1,311.48 as support to break to the top.
Daily Chart
Markets sentiment is neutral
SWFX market sentiment is neutral on Gold, as 51% of open positions are short. Accordingly, the same number of pending commands is set to buy the commodity.
OANDA traders are bearish, as 55% of open positions are short (-1%). In the meantime, SAXO bank traders are 54% bullish (+1%).