- 57% of all SWFX open positions are long
- The yellow metal recently formed a short term ascending channel
- The 1,250 level provided support for a week
- Economic events to watch over the next 24 hours: GfK German Consumer Climate; German Import Prices; Italian Retail Sales; US Goods Trade Balance; US Prelim Wholesale Inventories; US Flash Services PMI; US New Home Sales
American consumers were more pessimistic about the path of the economy in October, according to latest survey results published on Tuesday. The Conference Board's Consumer Confidence Index dropped unexpectedly to 98.6 points in October, following the prior month's 104.1, the best level since 2007, while market analysts anticipated a milder decrease to 101.5 during the reported period. The Present Situation Index fell to 120.6 from 127.9 in the tenth month of the year, while the Expectations Index dropped to 83.9 from 87.2 registered last month. Furthermore, the share of respondents expecting more jobs in the upcoming months declined to 13.1% from September's 15.7%, whereas the percentage of those expecting incomes to rise remained unchanged at 17.5% in October. Nevertheless, the share of respondents expecting fewer jobs fell to 17.0% from 18.1% seen in September, as well the percentage of those expecting incomes to drop to 9.8% from the previous month's 10.4%.
Activity in the US manufacturing sector expanded more than expected last month, according to a private survey published on Monday. The Market Research Group said that its Preliminary Manufacturing Purchasing Manager's Index for the United States jumped to 53.2 in October, following the preceding month's final reading of 51.5 and surpassing the 51.6 market forecast. Any reading above 50 points indicates an expansion and is based on a survey of manufacturers across the country. US manufacturers recorded strongest upturn in business conditions for 12 months in October, while both output and new order growth touched their one-year peaks last month. The US manufacturing sector was hit severely by the US Dollar's sharp appreciation and weak global economic growth. Back in September, the PMI rebounded from a contractionary reading of 49.4, the first drop below the 50 point level since February. Furthermore, some respondents mentioned there was a rise in international and domestic sales.
Upcoming fundamentals: Minor US data
In the second part of the day minor data from the US will be published, as at 12:30 GMT US Goods Trade Balance and Preliminary Wholesale Inventories will be available. Afterwards, at 13:$5 GMT the US Flash Services PMI will be out. Last but not least, the US New Home Sales are set to be released at 14:00 GMT.
Gold breaks resistance on Wednesday
Daily chart: The yellow metal surged on Wednesday morning, as it was ignoring the strength of the US Dollar and broke through two resistance levels and was about to break the last remaining resistance of the cluster. Previously, the metal found support in the weekly PP and attempted to break through the resistance cluster located from 1,269.86 to 1,276.81. Traders should keep their eyes on the 1,276.81 level, where the last resistance is located at, as the further way to 1,287.72 would be open, if the weekly R1 gets broken.Daily chart
Hourly chart: The hourly chart shows an impressive ascending channel pattern, which begins on October 11 and indicates that the metal is set to break through the weekly R1 at 1,276.81 and will reach the weekly R2 by the end of the week. At the moment, the commodity price is in a rebound from the channel's lower trend line, which was supported by the weekly PP and 200-hour SMA.
Hourly chart
Traders remain bullish
Meanwhile, OANDA Bank and SAXO bank trader bullish sentiment has majorly decreased. OANDA open long positions have shrunk to 71.51%, compared to 75.16% on Tuesday. SAXO bank clients have been even more active in cutting their long positions, as 61.15% of traders are long, compared to 69.25% during yesterday's trading. In general the data is very contradicting to the Tuesday's and Wednesday's price increase.