- 51% of all SWFX open positions are short
- The yellow metal traded in a short term ascending channel for almost a month
- The recent surge was caused by the US presidential election
- Economic events to watch over the next 24 hours: US Average Hourly Earnings; US Non-Farm Employment Change; US Unemployment Rate; US Trade Balance; FOMC Member Fischer Speaks
The number of Americans filing for unemployment benefits rose unexpectedly last week, official figures showed on Wednesday. According to the US Department of Labor, initial jobless claims jumped 7,000 to a seasonally adjusted 265,000 in the week ended October 29, the highest reading since the beginning of August. That marked the 87th consecutive week of initial claims below the 300,000 level, the longest streak since 1973. Meanwhile, market analysts anticipated a slight decrease to 257,000 filings from the preceding week's 258,000. The four-week moving average of claims, which is considered a better measure of labor market trends, rose 4,750 to 257,750 last week. Other data released on Wednesday showed that the Institute for Supply Management's Non-Manufacturing Index declined to 54.8 in October from 57.1 seen in September, while economists anticipated a slighter decrease to 56.2 points. However, any reading above the 50 point-level indicates expansion in the service sector. The Business Activity Index and Employment Index fell to 57.7 and 53.1 in the same month, respectively. Separately, the US Census Bureau said factory orders advanced 0.3% in September, following the prior month's gain of 0.4% and surpassing the 0.2% rise forecast.
As data released yesterday, US crude oil stockpiles advanced more than 14 million barrels during the previous week, showing the largest weekly build since the US Energy Department started keeping records back to 1982. As data suggests, West Texas Intermediate crude prices drop 1.13% with the report's release, stabilizing at $46.33. Brent prices, in turn, went down 1.42% at $47.92. Nevertheless, oil had rallied earlier on Wednesday on a sliding dollar, and after Colonial Pipeline had to shut down its main pipeline for a second time in as many months following an explosion. Overall, oil prices tumbled around 3% yesterday after a record weekly build in US crude stocks added to worries of all-time highs in OPEC production. In the meantime, the deal in Doha fell apart as OPEC's biggest producer Saudi Arabia would not accept Iran's position that it is their sovereign right to increase output. The general purpose of the most recent meeting was to finalize details of supply cuts and how cartel members and non-members led by the Russia will share the cuts. Although, the non-OPEC members including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia together produce 21% of global supply or around 19.6 million barrels each day.
Upcoming fundamentals: More US unemployment data and FOMC clues
US events will affect the strength of the Greenback today, as at 12:30 GMT US Average Hourly Earnings, Non-Farm Employment Change and Unemployment rate will be published. Moreover, the US trade balance will be out at the same time. However, rather keep a close look at the employment data. In addition, regarding US monetary policy, FOMC Member Fischer is set to give a speech at 20:00 GMT.
Gold trades below 1,300
Daily chart: The yellow metal was in a full on retreat on Friday morning, as it had erased all of Thursday's gains. However, the situation seems only temporary, as the metal is still set to surge, as it is indicated by various factors. First of all, the metal has reached the support provided by the weekly R2 at 1,296.73. Secondly, trader set up orders are mostly long. Third is the fact that daily aggregate technical indicators forecast a surge. Last but not least, the US election is not over and the drama will continue.Daily chart
Hourly chart: The hourly chart for the yellow metal reveals that the bullion fell after it met with the upper Bollinger band at 04:00 GMT on Thursday. In the resulting fall the commodity price fell even to the first weekly resistance level at 1,285.54. There the metal found support at 12:00 GMT and began to surge up to 1,304.22 by 00:00 GMT on Friday. However, the bullion has fallen since then to the weekly R2 at 1,296.73.
Hourly chart
SWFX sentiment almost neutral
OANDA open long positions have decreased to 64.23%, compared to 69.58% on Thursday. SAXO bank traders remain long and have slightly increased their bullish positions to 54.96%, compared to 52.90% on Thursday.