- 56% of all SWFX open positions are long
- Gold opened Wednesday's session at 1,267.46
- Economic events to watch over the next 24 hours: US ADP Non-Farm Employment Change; US Trade Balance; US Final Services PMI; US ISM Non-Manufacturing PMI; US Factory Orders
Manufacturing activity in the United States rebounded in September after a disappointing August report, official data showed on Monday. The Institute for Supply Management said its Index of manufacturing activity advanced to 51.5 in September, following the previous month's 49.4, while market analysts pencilled in a 1.0 point-acceleration to 50.4 in the reported month. Back in August, manufacturing output contracted for the first time since February of this year, as only six out of 18 industries reported growth. A number below 50 points indicates contraction in the US manufacturing sector, while a number above indicates improving conditions. Furthermore, the New Orders Index rose to 55.1 the Employment Index jumped to 49.7 in September from last month's 49.1 and 48.3, respectively, while the Price Paid Index remained unchanged at 53.0, in line with analysts' expectations. The data indicated that nine of the 18 industries reported a rise in new orders, while 10 of the 18 industries reported an increase in production last month. After the release, the US Dollar rose against other major currencies, trading at 1.1217 against the Euro, 1.2833 against the Sterling and 101.44 against the Japanese Yen. Meanwhile, the US Dollar Index rose 0.25% to 95.694.
Consumer prices in the Euro zone increased last month, official data showed on Friday. According to Eurostat's preliminary reading, the annual Consumer Price Index in the region advanced 0.4% in September, following to the preceding month's 0.2% and meeting analysts' expectations. Meanwhile, the so-called core CPI, which excludes food, energy, alcohol and tobacco, rose 0.8% in the reported month, unchanged from the previous month's reading, whereas economic desks anticipated a slight acceleration to 0.9%. Prices of food, alcohol and tobacco jumped 0.7% in the ninth month of the year, following August's rise of 1.3%, while prices of services and 1.2%, slightly up from the previous month's 1.1%. Non-energy industrial goods prices accelerated 0.3%, unchanged from August, whereas the price of energy declined 3.0% in September, following the prior month's 5.6% fall. The Euro zone seasonally adjusted unemployment rate was 10.1% in August, in line with July's reading but down from 10.7% seen in the same month year ago. Other data released by Federal Statistics Office showed that Germany's retail sales increased 3.7% on an annual basis and dropped 0.4% in August. The July figure was revised down to a gain of 0.5% from the originally reported rise of 1.7%.
Upcoming fundamentals: Employment, trade, services and factory orders
Data affecting the US Dollar and subsequently all of the financial instruments, which involve it, will begin pouring in at 12:15 GMT, when the ADP Non-Farm Employment Change will be published. Afterwards, at 12:30 GMT the US Trade Balance will be out, and at 13:45 GMT the US Final Services PMI will be released. Last but not least the US ISM Non-Manufacturing PMI and US Factory Orders will be published at 14:00 GMT.
Gold plummets 3.4% on Tuesday
Daily chart: The yellow metal edged higher on Wednesday morning and reached a resistance cluster located around the level of 1,275. However, the markets are still amazed at the drastic fall, which occurred in the second half of Tuesday's trading. The bullion fell to the level of 1,266.93 near the end of the day's trading session. This fall is the result of a breakout, which formed in the recent months and could have been seen fully on September 26. Although, it was expected that the breakout will be to the upside and consistent with the long term rising wedge pattern.Daily chart
Hourly chart: On the hourly chart it can be seen that the fall of the yellow metal was not sudden. The metal traded almost flat until 11:00 GMT on Tuesday. Afterwards the bullion began to fall until it reached the 1,267.10 level by 20:00 GMT. However, since then the yellow metal has regained some of its strength.
Hourly chart
Trader orders become almost neutral
Meanwhile, OANDA Bank clients remain majorly bullish with respect to the bullion, as on Wednesday morning 76.00% of all positions were long. In the meantime, SAXO bank clients show a similar trend with 67.85% of all positions being held by bulls.