- Share of long open trades is unchanged at 53%
- Consolidation above 1,155 will allow for a rise up to 1,170
- Bulls are losing advantage after hawkish Janet Yellen's remarks
- Economic events to watch in the next 24 hours: German Bundesbank President Jens Weidmann Speaks; Euro zone M3 Money Supply (Aug); US Final GDP (Q2) and Services PMI (Sep)
The number of Americans seeking unemployment benefits rose slightly in the week to September 19, but remains consistent with a labour market that is steadily adding jobs. Initial jobless claims across the US advanced by 3,000 to a seasonally adjusted 267,000 in the reported period, while markets expected an increase to 272,000 claims. Meanwhile, another bunch of data from the US revealed that factories in the world's largest economy saw the first decline in orders for durable goods in three months. Orders for big-ticket items fell 2% in August, following the downwardly revised gain of 1.9% in the prior month. Bookings for core capital goods edged 0.2% lower on a monthly basis in August, missing the estimate for 0.4% rise.
Meanwhile, Chairwoman of the Federal Reserve Janet Yellen spoke yesterday in Massachusetts. She admitted that the majority of FOMC members are favouring an increase of the Federal Funds rate this year. However, any unexpected economic events may change that plan, she added. In addition to that, Yellen underlined that recent financial and economic developments, especially in China, might damp outlook for economic recovery and inflation. It was the main reason, why the Fed left rates on hold a week ago.
Upcoming fundamentals: US GDP growth to be confirmed at 3.7%
Even though usually the third reading for US GDP brings some changes from two previous assessments, this time analysts see the second-quarter expansion to be affirmed at 3.7%. However, a revision may take place even later, when US trade balance data is released next week and exports-imports balance changes. Meanwhile, US services industry has probably continued to advance as the PMI indicator for this sector may reach 55.5 points in September, down slightly from 56.1 points in August.
Gold's rally past 1,150 halted by Dollar bulls
On Thursday the yellow metal's bulls took overwhelming control over the market as they sent the price into the 1,150 region by the end of trading, up $23 on a daily basis. It was the sharpest surge gold has observed since May 13. Despite closing above both 100-day SMA and weekly R1, the metal is correcting lower at the moment, following Dollar-positive comments from Fed Chair Janet Yellen. As daily and weekly technical indicators are giving mixed signals, we suggest that steep moves are unlikely today, unless US GDP brings unexpected numbers. The price is assumed to be bounded between 1,150 and 1,140 today.Daily chart
XAU/USD penetrated the triangle pattern's upper boundary in the one-hour chart. This event happened much earlier than could be anticipated and it increases the probability of a continuous bullish trend. Additional mid-term support should be provided by the upward-sloping 200-hour SMA, currently at 1,127.
Hourly chart
SWFX share of bulls consolidates at 53%
Meanwhile, OANDA share of bulls plummeted even more to 57% of all positions, while SAXO Bank traders are keeping 59% (-2%) of bullish trades on Friday morning.