- Bearish share rallied from 46% to 53% and gained moderate majority of SWFX market
- Consolidation below 1,137 will reopen 1,117 (uptrend) for bears
- Daily technical indicators continue to be undecided on Tuesday
- Economic events to watch in the next 24 hours: Spanish Unemployment Change (Oct); ECB President Draghi Speaks; US Factory Orders (Sep); UK Construction PMI (Oct); New Zealand Unemployment Rate and Employment Change (Q3); Australian Trade Balance and Retail Sales (Sep); Chinese Caixin Services PMI (Oct)
The Reserve Bank of Australia refrained from slashing the official cash rate amid signs of an upswing in business morale, but signalled that subdued inflation gives scope to cut rates if needed. The RBA kept the benchmark rate at a record-low 2.0% for a sixth consecutive month. Financial markets are now pricing in a 32% chance of a rate cut in December, down from 70% before the central bank's decision. Prospects of more official interest rate cuts remain on the table given the RBA's determination to keep downward pressure on the Aussie Dollar, which is helping boost the competitiveness of exporters. Moreover, any delay in the Fed's decision to hike rates may force the RBA to deliver additional cuts to the official cash rate.
Meanwhile, factory activity in the UK surprisingly improved, surging to a 16-month high in the tenth month of the year, spreading optimism over the British economic outlook. A report of market research group Markit revealed that the UK manufacturing PMI jumped up from September's reading of 51.8 to a seasonally adjusted 55.5 in October. This figure indicates that the sector has been growing as any reading above the threshold of 50 points represents an increase in manufacturing activity, whereas one below the threshold implies the industry's contraction. Economists had forecasted the index to move down to 51.3 last month. According to the survey, the gain of 3.7 point in the PMI level was one of the sharpest booked over the near 24-year survey history.
Upcoming fundamentals: UK construction PMI and big portion of data from Asia/Pacific
Activity in the construction sector of Britain will most likely continue to grow strongly in October, albeit at a marginally slower pace than in September. The PMI survey projects the reading of 58.9 points for October, down from 59.9 points on a monthly basis. Several countries from Asian region will also publish important fundamental statistics in the next 24 hours. Experts project the New Zealand's unemployment rate to rise by one tenth of a percent to 6.0% in the third quarter of this year, with employment estimated to advance by 0.4%. This data will be released at 21:45 GMT and will be followed by Australian international trade and retail sales numbers at 23:30 GMT. Trade deficit is forecasted to decrease in September on a month-to-month basis, while retail sales may rise by 0.4% in the same month.
Gold violates 55/100-day SMAs, sets eye on 1,117
As it was expected, the second attempt to penetrate both 55 and 100-day SMAs used to be quite successful. A decline was prolonged down to 1,133 by Monday evening, even though gold has somewhat bounced back on Tuesday. In case bears hold the price below 1,137 through the next 24 hours, we are going to confirm our bearish expectations for the bullion. Main focus is going to switch to the three-month uptrend at 1,117. In the meantime, on the way down both weekly S1 and lower Bollinger band will have to be breached at 1,126 and 1,122, respectively.Daily chart
Without noticing any supports, the precious metal is falling down in the one-hour chart. It affirms our bearish views explained earlier. The 200-hour SMA is located at 1,158 right now, while the trend has remained negative since Oct 26. This fact may support the bullion's slump in the medium term.
Hourly chart
SWFX bullish share unexpectedly falls below 50%
Despite all, OANDA's long traders are gaining even higher market share, while the total number of their open positions rose from 62.5% to 65.8% in the past 24 hours. On top of that, 59% (58% yesterday) of SAXO Bank clients also preserve their positive stance with respect to gold.