- 60% of all SWFX open positions are long
- Pending orders optimistic with 68% to buy
- Gold opened Wednesday's session at 1,161.97
- Economic events to watch over the next 24 hours: US core retail sales; US PPI; US retail sales; US Crude oil inventories; FOMC economic projections; FOMC statement; Federal funds rate; FOMC press conference
US import prices dropped markedly last month after two consecutive monthly gains, amid the lower cost of imported petroleum and stronger US Dollar. According to the US Department of Labor, import prices fell 0.3% in November, the biggest decline since February, following the previous month's downwardly revised gain of 0.4% and meeting analysts' expectations. On an annual basis, import prices decreased 0.1%, the smallest fall since July 2014, compared to October's drop of 0.3%. Last month's drop in import prices is unlikely to impact expectations that the Fed will raise rates at the end of its two-day policy meeting on Wednesday this week. The Greenback's surge and a plunge in oil prices between June 2014 and December 2015 dampened import price inflation. Imported petroleum prices declined 4.7% in November, the biggest drop since February, following the prior month's increase of 7.3% and offsetting a 10.6% rise in the price of imported natural gas. Excluding petroleum, import prices held steady last month, compared to October's 0.1% decline. The report also showed that export prices fell 0.1% in the same month, after climbing 0.2% in October. Yearover-year, they dropped 0.3% in November, the smallest decrease since August 2014, after dipping 1.0% on the same basis in October.
The United States' services sector activity hit its one-year high last month, official figures revealed on Monday. The Institute of Supply Management reported its Non-Manufacturing Purchasing Managers' Index advanced to 57.2 in November from the previous month's 54.8 points. The November figure was the highest since October 2015 and marked the 82nd straight month of growth in the sector, while analysts anticipated the Index to come in at 55.3 in the reported month. Any reading above the 50 point level indicates expansion in the services sector, which accounts for more than twothirds of the US economy. Furthermore, the Employment Index climbed to 58.2 from October's 53.1 points, showing that hiring rose at a much faster pace in November. The Non-Manufacturing Business Activity Index rose to 61.7 from 57.7 in October, while the New Orders Index dropped to 57.0 from 57.7 and the Prices Index came in at 56.3, losing 0.3 points during November. The majority of respondents expressed a positive view of the economy. Earlier, Markit's final Services PMI for the US came in at 54.6, slightly below the 54.8 point forecast. As a result, the EUR/USD was unchanged at 1.0728, while the GBP/USD fell to 1.2712 from 1.2716 from ahead of the release and the USD/JPY rose from 114.37 to 114.62.
Upcoming fundamental releases: US retail sales; US PPI; US Crude oil inventories; FOMC statement; Federal funds rate
With a multitude of high impact fundamental data being released on Wednesday, markets are bound to be shaken up by surprise reactions, which could cause both false and credible breakouts of levels of significance. 13:30 GMT will bring US core retail sales, US retail sales and month on month PPI, while crude oil inventories come out at 15:30 GMT. Another time that is bound to bring uncertainty will be 19:00 GMT, when the Federal Funds rate, accompanied by the FOMC statement and projections and released and concluded with a press conference at 19:30 GMT.
Gold keeps bulls on their toes
Daily Chart: Gold continued its way outside of the channel it previously respected and distanced itself from the senior downtrend as well. Resistance is now set at 1,167.76, the weekly Pivot Point and the floor is now the broken trend-line at 1,154.13. More notable support lies at 1,147.45, where the weekly S1 and bottom Bollinger Band clusters, but we would not look for tests of this level today. The broken pattern should imply an extensive surge with gains likely cut at the immediate resistance.Daily chart
Hourly chart: The hourly chart shows that the rate has retraced from the broken trend-line supporting our scenario of a close in the green zone for Wednesday. XAU/USD is now squeezed between the 55 and 100-hour SMAs and will require decent demand pressures to push right through. Nevertheless, we expect the pair will manage to soar, even if a corrective phase is needed to establish a flatter motion.
Hourly chart
SWFX sentiment stays the same
The optimistic OANDA Gold traders have found the Bullion even more attractive on Wednesday, as open positions were 82.78% long, compared to 81.91% on Tuesday. Meanwhile, traders of SAXO bank seem to have slightly decreased their bullish stance, as Tuesday showed 65.11% of traders betting the metal will surge, compared to 67.17% during the previous session.