- 58% of all SWFX open positions are long
- 67% of pending commands were to buy the metal
- The bullion jumped 1.67% during Friday's session
- No upcoming Events: Bank holiday for the US
Business activity in the Chicago region dropped unexpectedly in December, official figures showed on Friday. The Institute for Supply Management said its Chicago Purchasing Managers' Index fell to 54.6 points in the reported month after rising to 57.6 in November, while market analysts anticipated a slight deceleration to 56.5. However, any reading above the 50 point-level indicates expansion in business activity. Three of the five barometer components decreased between November and December, whereas employment held steady and supplier deliveries grew modestly. The worse than expected result was mainly driven by a slump in new orders, which fell 6.7 points to 56.5. Despite December's decrease, the Q4 reading reached its two-year high. About 50% of respondents said they expect the new administration to bring positive changes and benefit their businesses, whereas 40% noted that they expect no changes and 9% of respondents project a decline in business activity. As a result, the EUR/USD pair jumped from 1.0529 ahead of the release to 1.0544, while the GBP/USD advanced from 1.2357 to 1.2377.
Americans became more optimistic about the economy in December since the postelection bump in confidence continues. As data suggest the US consumer confidence reached its highest in more than 15 years during the previous week as Americans expect more strength ahead in business conditions, stock prices and the job market following the election of Donald Trump as president in November. According to the Conference Board the Consumer Confidence Index advanced to 113.7 in December from an upwardly revised 109.4 in November. Meanwhile, the data topped estimates in a Reuters poll for a reading of 109.0. Another reason for the gain in confidence is surging optimism among older Americans. Economists follow confidence indicators because upbeat consumers are more likely to increase personal spending, which makes up most of the US economy.
No events for XAU/USD
Bullion supply and demand in balance
Daily chart: There was no trading of Gold Monday morning, which led to a lack of motion in the XAU/USD price. As for future movements, the pair has dashed through the 20-day SMA, but losses are likely to be cut at 1,138.98, the lower trend-line. We will look for the channel to remain in force until the upper trend-line of the senior bearish channel is reached, and it could take around at least three weeks to do that. The current downward motion could experience some hitches at 1,148.39, the weekly Pivot Point before the ultimate daily target is addressed.Daily chart
Hourly chart: The hourly chart shows a solid downtrend for EUR/USD before markets closing, and we would look for the motion to extend towards the bottom trend-line of the channel. Demand areas at 1,148.39, 1,146.23 and 1,140.90 will, however, mess with the bearish momentum and will require quite some weakness to dive underneath, meaning that the motion could gain some flatness and cause a few false reversal signals.
Hourly chart
SWFX traders still optimistic
OANDA Gold traders remain largely optimistic regarding the Bullion, as open positions were 86.75% long. Meanwhile, traders of SAXO bank also increased their bullish stance, as today showed 66.43% of traders betting the metal will surge, compared to 62.53% during the previous session.