- 58% of all SWFX open positions are long
- The yellow metal recently formed a short term ascending channel
- The 1,250 psychological level provided support for a week
- Economic events to watch over the next 24 hours: ECB Press Conference; US Philly Fed Manufacturing Index; US Unemployment Claims
US housing starts dropped unexpectedly last month, whereas building permits rose more than expected, official figures revealed on Wednesday. According to the US Department of Commerce, the total number of housing starts issued fell 9.0% to a seasonally adjusted annual pace of 1.05 million in September, hitting the lowest level since March 2015, while market analysts anticipated a slight increase to 1.18 million units during the reported period. August's housing starts were revised up to a 1.15 million rate from the originally reported pace of 1.14 million starts. US single-family starts, which account for the largest segment of the market, climbed 8.1% to a 783,000 unit pace last month, the highest reading since February. The drop was mainly driven by the volatile multi-family segment, which posted a 38.0% decline to 264,000 unit pace in September. In the meantime, building permits advanced 6.3% to a seasonally adjusted annual pace of 1.23 million in the same month, following August's upwardly revised reading of 1.15 million permits and surpassing the 1.17 million unit pace market forecast. Building activity is set to rebound in the coming months as building permit values remained strong, with single-family and multi-family permits rising 0.4% and 16.8% in September.
US consumer prices rose most since April last month, driven by a surge in gasoline and rental prices. On Tuesday, the US Department of Labor said its Consumer Price Index advanced 0.3% in September, following the preceding month's gain of 0.2% and meeting analysts' expectations. On an annual basis, the CPI climbed 1.5%, posting the biggest year-over-year rise since October 2014 and surpassing August's 1.1% increase. Meanwhile, the so-called core CPI, which excludes food and energy prices, rose 0.1% month-over-month and 2.2% year-over-year in the same month after climbing 0.3% on a monthly basis and 2.3% on a yearly basis in August. Notwithstanding, today's disappointing core CPI data is unlikely to change the prospect of a Fed rate hike in December. The September increase was mainly driven by higher gasoline prices that surged 5.8% after falling 0.9% in August. The price of food remained unchanged for the fifth consecutive month in September. As to the core CPI, owners' equivalent rent of primary residence advanced 0.4%, following the 0.3% rise in August, while medical care costs grew 0.2%, compared to the preceding month's 1.0% hike. Hospital services prices held steady in September, whereas prescription drug costs climbed 0.8%.
Upcoming fundamentals: The ECB and US data
At 12:30 GMT the ECB Press Conference will be held. As the ECB Press Conference affects the financial markets, in the US more data will be published, as the Philly Fed Manufacturing Index and US Unemployment Claims will be published at the same time.
Gold continues to rise
Daily chart: The yellow metal was in the process of breaking through one more resistance cluster on Thursday morning. Previously, the metal was hindered by the 200-day SMA, which gave up, as it moved higher. On Thursday the simple moving average was providing support to the bullion in its surge. However, the metal faced a resistance cluster made up from the weekly R2 1,272.71 and monthly S2 at 1,273.23. Moreover, the 20-day SMA is located at 1,277.12, and the weekly R3 is providing resistance at 1,280.49. Due to that, gold is set up to retreat.Daily chart
Hourly chart: The yellow metal cleared off from the weekly R1 around 6:00 GMT, and began a sudden surge. Afterwards, the metal reached the resistance cluster located above it, and already the bullion has made two attempts to break through the cluster. However, the metal lacks the necessary support to break through it, as only the 20-hour SMA is prepping up the commodity price.
Hourly chart
Traders remain bullish
Meanwhile, OANDA Bank clients remain majorly bullish with respect to the bullion, as on Tuesday morning 78.36% of all positions were long. In the meantime, SAXO bank clients show a similar trend with 59.60% of all positions being held by bulls.