- 50% of all SWFX open positions are long
- Gold reached a rising wedge pattern's lower trend line on Thursday
- Economic events to watch over the next 24 hours: US FOMC Economic Projections, FOMC Statement; US Federal Funds Rate; FOMC Press Conference.
US housing starts dropped more than expected last month, official figures revealed on Tuesday. According to the US Department of Commerce, housing starts declined 5.8% to a seasonally adjusted annual pace of 1.14 million units in August, following the preceding month's 1.21 million-unit rate and falling behind the 1.17 millionunit pace market forecast. Starts of single family houses declined 6.0% to a 722,000 unit rate in August, the lowest level since October of 2015, whereas housing starts for the volatile multi-family segment dropped 5.4% to a 420,000 unit pace. In the meantime, building permits plunged 0.4% in August to a seasonally adjusted rate of 1.14 million units as approvals in the volatile multi-family segment fell 7.2% to a 402,000 unit-pace, whereas permits for single–family homes jumped 3.7% to a 737,000 unit-rate last month. Market analysts expected permits for future construction to hit 1.17 million units in the reported month. In regional terms, single-family new house construction building permits fell in both the Northeast and South 13.8% and 13.1%, respectively, but increased in the West and Midwest. After the release, the US Dollar fell slightly, trading at 1.1182 against the Euro, 1.2967 against the British Pound and 101.83 against the Japanese Yen.
Confidence among US homebuilders improved in the ninth month of the year, official data revealed on Monday. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) jumped to 65 in September, the highest reading since October last year, whereas market analysts expected the Index to come in at 60 points. The August reading was revised down to 59 from the originally reported reading of 60. Any reading above 50 indicates an overall positive outlook. The Index was seen mostly at 58 points, rising to 61 in January. According to the report, current sales advanced to 71 in September from August's 65, the fastest pace in nearly nine years, whereas sales expectations in the next six months climbed to 71 from the preceding month's 64. In the meantime, buyer traffic rose to 48 from last month's 44 points, remaining below the 50-point level. In regional terms, on a three-month moving average basis, homebuilder confidence in both the Northeast and South increased one point to 42 and 64 points, respectively, as well as it improved in the West to 73 from last month's 69 points. The Index found builder sentiment held steady at 55 in the Midwest.
Upcoming fundamentals: Federal Open Markets Committee
As the title suggests, the markets today will be affected by the Federal Open Markets Committee, which is meeting today. The information flow from the committee will come in at 18:00 GMT, as at that time various data will be released. First of all the FOMC will publish their Economic Projections and their Statement. However, the most important will be the Federal Funds Rate at that time. Afterwards, as it is accustomed, the FOMC will host a press conference at 18:30 GMT.
Gold continues to struggle with resistance
Daily chart: The yellow metal continued to try and break the resistance put up by the weekly pivot point at 1,316.02 on Wednesday morning. Although, the metal had reached far above the resistance and touched the 1,320 mark, it retreated afterwards, as the 20-day SMA is approaching at 1,322.16, and it is set to provide additional resistance against the bullion's surge. Daily aggregate technical indicators forecast a fall of the metal by the end of the day's trading session, and the closest support level is at 1,305.52. Both of these factors indicate, that the rising wedge pattern of the metal might be soon broken.Daily chart
Hourly chart: On the hourly chart for gold it can be seen that the metal actually made two attempts to break through the resistance in the past 24 hours. First of all there was a long attempt to move through the weekly PP from 2:00 GMT to 8:00 GMT on Tuesday. However, that failed and the metal continued to fluctuate just below the PP, as it was supported by the 55-hour SMA below. There were minor reaches above the resistance level leading up to Wednesday morning. Although, the most notable movement happened from 4:00 GMT to 5:00 GMT, as the metal bounced up to 1,320 and later on retreated down to 1,310. At the moment of writing, the bullion was regaining lost ground and resumed to pound on the resistance cluster.
Hourly chart
Traders remain neutral on the bullion
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 78.66%. In the meantime, SAXO bank clients are also bullish on the yellow metal, as 64.48% of positions are long.