- Market sentiment is 51% bearish
- 70% of pending orders in 1000-pip range are set to BUY gold
- Gold prices surge to 1,335.00 mark
- Federal Reserve caused a jump
The early hours of Wednesday experienced the bullion breaking one resistance level after another, as the various SMAs and a Fibonacci retracement level where passed. Although, the yellow metal's price was still set to meet with the resistance of the 200-hour SMA near the 1,319 mark. Moreover, a beat down of the price might occur during the hike of the Federal Funds rate, which is set to occur at 18:00 GMT.
The US Census Bureau revealed on Friday that the US building permits data did not meet expectations, showing the growth pace of only 1.30M units in February, following the downwardly revised 1.38M reading in the prior month.
The stronger-than-expected fall in the US homebuilding was caused by a plunge in the multi-family housing construction offsetting a rise in single-family projects for the second month in succession.
Unemployment Claims
The main event of the week has occurred, the Fed rate hike has caused the US Dollar to plummet due to the fact that Jerome Powell revealed additional information. Namely, there will be three rate hikes this year. Due to the fact that it was less than already priced in by the markets, the drop occurred.
Meanwhile, watch for the weekly US Unemployment Claims data, which might cause some minor fluctuations in the currency exchange rates. If the bounce is too big, it could trigger some stop losses.
XAU/USD bearish after a surge
The yellow metal was guided by strong upside risks on Wednesday. It hindered near the resistance of the 55-, 100– and 200-hour SMAs, but eventually managed to push through these lines and the prevailing five-week trend-line circa 1.320.00.
Additional push was given by the FOMC policy statement at 1800GMT. As a result, the pair closed the session at a two-week high of 1,335.00. The 23.60% Fibonacci retracement is likewise located nearby.
The current positioning of the rate suggests that some correction south is likely to occur in this session. However, a move below the previously-breached resistance of 1,320.00 is unlikely.
This area is likely to mark a reversal that would allow the pair to resume its upward movement in the senior channel.
Hourly Chart
The resistance marked previously on the large scale chart was broken by the Fed's conference. Namely, the jump up to the 1,335.00 mark was caused by Jerome Powell's comments.
In addition, it can be spotted that the 100-day SMA from a technical perspective caused a reversal of the direction of the metal's price movement. Moreover, it is moving upwards and might be relevant once more in April.
Meanwhile, One can notice, that the 55-day SMA was providing support on Thursday morning.
Daily Chart
Markets have moved into the neutral zone
SWFX market participants no longer have a collective opinion, as traders are neutral. Meanwhile, pending commands have become slightly bullish, as 56% of all set up orders were to buy.
OANDA traders are also neutral, as 50% of open positions were long on Thursday. However, Saxo bank traders are going short in 51% of all cases.