- 60% of all SWFX open positions are long
- Pending orders remained optimistic with 60% of long positions
- Gold opened Tuesday's session at 1,169.10
- Economic events to watch over the next 24 hours: US revised non-farm productivity, US trade balance, US factory orders
The United States' services sector activity hit its one-year high last month, official figures revealed on Monday. The Institute of Supply Management reported its Non-Manufacturing Purchasing Managers' Index advanced to 57.2 in November from the previous month's 54.8 points. The November figure was the highest since October 2015 and marked the 82nd straight month of growth in the sector, while analysts anticipated the Index to come in at 55.3 in the reported month. Any reading above the 50 point level indicates expansion in the services sector, which accounts for more than twothirds of the US economy. Furthermore, the Employment Index climbed to 58.2 from October's 53.1 points, showing that hiring rose at a much faster pace in November. The Non-Manufacturing Business Activity Index rose to 61.7 from 57.7 in October, while the New Orders Index dropped to 57.0 from 57.7 and the Prices Index came in at 56.3, losing 0.3 points during November. The majority of respondents expressed a positive view of the economy. Earlier, Markit's final Services PMI for the US came in at 54.6, slightly below the 54.8 point forecast. As a result, the EUR/USD was unchanged at 1.0728, while the GBP/USD fell to 1.2712 from 1.2716 from ahead of the release and the USD/JPY rose from 114.37 to 114.62.
The number of homes that went under contract inched higher in October, a sign the housing market could be plateauing in the final months of the year. The National Association of Realtors reported that its pending home sales index, which tracks contract signings for previously owned homes, edged up 0.1% from a downwardly revised September reading to a seasonally adjusted 110.0. Sales typically close within a month or two of signing. It is essential to note that while demand for housing is high, supply still continues to weaken across much of the nation and is well below 2015 levels. While homebuilders ramped up production in October, overall construction is still well below historical norms. Builders cite the high costs of land, labor and regulation as barriers to increased volume.
Upcoming fundamentals: US revised non-farm productivity, US trade balance, US factory orders
Volatility could be added by some fundamental data releases further down the day, with the ECOFIN meetings all day, as well as a set of US data – revised non-farm productivity and trade balance at 13:30 GMT, followed by factory orders at 15:00 GMT.
XAU/USD sticks to channel upper trend-line
Daily chart: Gold made several patterns give in to the three-week senior one, setting a ground at 1169.10 on Monday. Tuesday morning the bullion opened in the green zone, eager to re-test the upper trend-line of the channel at1178.21 where it is strengthened by the weekly Pivot Point. The XAU/USD pair is still near the senior downtrend (1158.87) that it has been respecting since August. Nevertheless, it has failed to touch it on the current wave south. Therefore, we see potential for a reversal during the session, that would lead to losses for the bullion and a close near the downtrend.Daily chart
Hourly chart: The hourly chart, however, shows the pair repeatedly touching the upper boundary of the senior channel, and the development of a motion that does not traditionally characterize intra-channel movements, which could suggest that the pattern will be broken to the upside around 1174.59. We will look for tests of the recent resistance at 1169.10 in order to get some signals on whether this will happen. A close below could give more ground to a potential continuation of the channel, while an additional confirmation of the level would mean that the pattern will break soon.
Hourly chart
SWFX sentiment stays the same
The extremely optimistic OANDA trader sentiment has remained roughly the same - 77.64% of open positions were long on Tuesday, compared to 78.06% on Monday. Meanwhile, traders of SAXO bank seem to have increased their bullish stance, as Tuesday showed 66.08% of traders betting the metal will surge, compared to 63.80 % during the previous session.