- Share of long open trades retreated further from 57% to 56%
- Bullish traders to set eyes on 100-day SMA and 61.8% retracement
- Bearish case to be complicated by strong demand zone at 1,134/24
- Economic events to watch in the next 24 hours: French GDP (Q2) and Manufacturing/Services PMI (Sep); German Manufacturing/Services PMI (Sep); Euro zone Manufacturing/Services (Sep); US Manufacturing PMI (Sep) and Crude Oil Inventories (Sep 18); Canadian Retail Sales (Aug); ECB President Draghi Speaks, FOMC Member Lockhart Speaks, New Zealand Trade Balance (Aug); SNB Quarterly Bulletin (Q3)
Meanwhile, the trade surplus in Switzerland contracted in August, as the strength of the Swiss Franc hit demand in the European Union and China. According to the FSO, Switzerland's trade balance amounted to 2.87 billion francs in the August, compared with a downwardly revised 3.58 billion francs registered in the previous month. However, the actual figure beat the market expectation of 2.75 billion francs surplus. The latest report also showed that real exports slipped by 2.4% on a monthly basis in the reported period after decreasing a revised 2.3% in July. Year-on-year, exports decreased by real 2.1% in August but slower than the 4.9% decline seen in July. Similarly, real imports declined 4% versus a 1.8% drop a month ago. On an annual basis, imports slid 7.4%, reversing July's 1.7% increase.
At the same time, China's manufacturing activity declined at its fastest pace since the peak of the global financial crisis, fuelling concerns over the world's second biggest economy's health. The preliminary Caixin China Manufacturing Purchasing Managers' Index dropped to 47.0 in September, the lowest level in more than six years, below the median forecast of 47.5. This compared with a final reading of 47.3 in August, the lowest since March 2009. New orders and new export orders both fell at a quicker pace in September, while factory output overall also dropped faster. The new orders sub-index declined 0.6 percentage points to 46.0 in September, while the new export orders sub-index slipped 0.8 percentage points to 45.8. It is the seventh straight month that conditions in Chinese manufacturing have deteriorated and is in line with other recent weak data of the domestic economy.
Upcoming fundamentals: Canadian retail sales to expand for second month in a row
Both core and headline Canadian retail sales are due to be released at 12:30 PMT on Wednesday. Analysts foresee the indicator to add 0.4%-0.5% for both readings on a monthly basis, following even stronger rise in July. While consumer spending accounts for more than 70% of the country's economy, retail sales can bring positive contribution to a GDP rebound in the third quarter of this year. Among other fundamentals from today, US oil inventories (14:30 GMT) are projected to drop by one million barrels for the week ended September 18 after a surprising decline in the preceding week. Moreover, economists see the New Zealand trade deficit increasing to NZ$875 million in August, which will mark the third straight month of imports exceeding exports.
Gold dives below 1,125 amid buoyant US Dollar
Second bearish attempt to send the price of gold below the 2014 low turned to be much more successful. The bullion has also failed at the monthly/weekly pivot points and the 38.2% Fibonacci retracement of the Aug-Sep downtrend. Therefore, yesterday the metal consolidated at the 1,124 mark, which is also the location of 20-day SMA. A decline below this line will refocus our attention on the 23.6% retracement and 55-day SMA at 1,116. Indicators on the daily time frame, however, are completely neutral for the time being.Daily chart
XAU/USD may try to establish the bearish channel in the one-hour chart. Despite that, in the nearest future the precious metal will face an important support zone, namely the 200-hour SMA at 1,119 and 23.6% retracement at 1,115. Our future expectations for gold are likely to be driven by the bullion's behavior around the mentioned levels.
Hourly chart
SWFX share of bulls is down to 55%
Meanwhile, OANDA share of bulls fell marginally from 63.70% to 63.18% of all positions, while SAXO Bank traders are keeping 64% of trades as the long ones.