- Market sentiment is 53% bearish
- 73% of pending orders in 1000-pip range are set to BUY gold
- Immediate support was located near 1,330 mark
- The surge needs additional support
The yellow metal's surge became almost parabolic on Tuesday. The event has caused a minor decline on Wednesday morning. In general, it is expected that support will be found in the various levels of significance, which are set to form a cluster just below the 1,330 level.
The US economy kept expanding in February, data showed on Monday. The ISM revealed that its non-manufacturing PMI stepped lower to 59.5 points in the reported month, compared to 59.9 in January.
Growth for the 103rd consecutive month, with 62.8% in February, was reflected by the non-manufacturing business activity index, showing 3% increase from the prior month.
Employment data coming in
Markets on Wednesday are resuming swing trading macroeconomic data. Namely, swing traders will concentrate on the ADP Non-Farm Employment Change, which will be released at 13:15 GMT. The data release will be covered by the Dukascopy research team on the bank's live webinar platform.
This data release will give the first hints about the situation in the US job market. However, this data release is not an official data publication. The official US labour data will be published on Friday.
XAU/USD moves in line with patterns
The yellow metal took advantage of the weaker US Dollar on Tuesday, thus managing to surge by 1.44% and reaching the 1,340.00 mark late in the evening. The pair breached the prevailing four-week channel down along the way, at the same time providing the second upper confirmation of a more junior pattern.
Technical indicators are in favour of a fall in this session that should be targeted towards the combined support of the 200-, 55– and 100-hour SMAs near 1,325.00.
The general direction, however, should be tended north this week, seemingly along the lines of the aforementioned junior channel, in order to test the most senior pattern circa 1,355.00.
Meanwhile, gains should be capped near the weekly R1 at 1,350.00 today.
Hourly Chart
On the daily chart one can notice that the recent resistance encountered is not just represented by the upper trend line of the short term channel. Near that level the support line of the previously active dominant ascending channel pattern is acting as a resistance.
Daily Chart
Markets short the metal
SWFX market sentiment on Wednesday had not changed since Tuesday, as traders were 53% bearish. Meanwhile, pending commands had become bullish, as 54% of all set up orders were to buy.
OANDA traders have slightly decreased their bullish opinion, as 54% of open positions were long on Wednesday, compared to 58% on Tuesday. In addition, Saxo bank traders are going long in 52% of all cases.