- SWFX traders are 54% bullish
- 71% of pending orders in 500-pip range are set to BUY the gold
- Pair crosses 1,296 mark
- Upcoming Events: US CPI and Retail Sales
Despite a release of better than expected data on the US Core PPI, the yellow metal continued to appreciate against the buck. To certain extent, the surge was related to incessant tests of nuclear weapons by North Korea. From technical perspective, the surge was supported by a combination of the 55-hour SMA and the lower support line of the rising wedge pattern.
The Labour Department revealed that the US Producer Price Index climbed 0.4% in September. Data suggested the growth fueled by higher gasoline prices, as they marked the strongest rise in two years due to production disruptions in Texas oil refineries caused by Hurricane Harvey. Moreover, the gain is set to bolster the Fed's case for the next rate hike this year despite sluggish inflation readings.
US CPI and Retail Sales
Today at 12:30 GMT traders can observe a double release, which will consist of the US Consumer Price Index and Retail Sales. Accordingly, their combined effect is expected to cause notable volatility in the markets. However, this is also very important even from fundamental point of view, as growth of inflation might have important implications on the upcoming Fed's decision to hike or not to hike interest rate in December.
XAU/USD fails to slip below 1,285.75
Although the Bureau of Labour Statistics released a better than expected US Core PPI, the buck did not manage to make any significant advances against the yellow metal yesterday. The reason for that was a combined support set up by the 55-hour SMA in conjunction with the bottom trend-line of a rising wedge. Accordingly, today the pair is expected to make a breakout from this pattern. The fact that the northern side near the 1,295.00 level is secured by the 55-day SMA indicates on breakout to the bottom. Moreover, this direction is line with trade patterns theory. However, there is need to take into account traders' reaction on release the US inflation and retail sales data, which might lead to active sell off of the Greenback.
Hourly Chart
Yesterday's trading session showed that that the pair failed to break through a combined resistance set up by the weekly R2 and the 55-day SMA. On the one hand, an uneasy geopolitical situation favours further increase of demand on gold. On the other hand, the US inflation and retail sales data might give an impulse strong enough to force the rate to change a direction.Daily Chart
Markets sentiment remains neutrally bullish
Traders of Dukascopy are bullish on valuation of the gold, as 54% of open positions are long. In the meantime, 54% of pending commands are to buy the commodity.
OANDA traders are bullish, as 67% (-4%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 57% (+0%) of open positions are also long.