- 52% of all SWFX open positions are long
- Friday's Janet Yellen's speech did not move the metal off course
- Economic events to watch over the next 24 hours: US ADP Employment Change (August); US Chicago PMI (August); US Pending Home Sales (July);
Confidence among American shoppers improved unexpectedly in August, according to the Conference Board's monthly survey. The survey's Consumer Confidence Index increased to 101.1 points in the eight month of the year, compared to July's reading of 96.7, while market analysts anticipated a slighter acceleration to 97.1 in the reported month. Nevertheless, back in August 2015, the indicator was higher at 101.4 points. The survey is a closely-followed barometer of consumer attitudes towards business conditions, personal finances, jobs and short-term outlook. The data showed that 30% of respondents stated that business conditions were "good" in August, following July's 27.3%, whereas 18.4% stated conditions were "bad", unchanged from last month. 17.3% of respondents predicted an improvement in the next six months, compared to last month's 15.7%, while 11.1% predicted deterioration, down from July's 12.4%. The share of respondents expecting their incomes to improve remained resilient; however, the outlook on the job market was mixed. Consumer sentiment among Americans remained in the positive territory for more than a year. A reading of 90 or above indicates economic expansion. The US economy is mostly driven by consumer spending, which accounts for about 70% of all economic growth.
The Federal Reserve's (Fed) favorite measure of inflation held steady in the seventh month of the year, official data revealed on Monday. According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index (PCE), excluding the volatile food and energy components, rose 1.6% year-over-year in July, unchanged from last month, while market analysts anticipated a slight decrease to 1.5% in the reported month. On a monthly basis, the core PCE grew 0.1% in July, in line with analysts' expectations and the previous month's reading. The overall PCE advanced 0.8% on a yearly basis in the same month, following June's 0.9% and meeting market forecasts. The data also showed that personal spending climbed 0.3% on a monthly basis in July, down from June's upwardly revised 0.5% gain, whereas personal income jumped 0.4% on the same basis in July, compared to last month's upwardly revised 0.3% hike. Both readings came in line with analysts' projections. Federal Reserve Chairwoman Janet Yellen left the door open for a hike this year during her speech in Wyoming, arguing that the US economy created a lot of jobs lately and it is on a moderate growth path, despite recent disappointing economic data.
Upcoming fundamentals: Various US data
As the second half of the day will begin, data from the US will be released. First of all the US Dollar's strength will be set by the ADP Employment Change for August, and the release will be covered by the Dukascopy team live on the webinar. At 13:45 GMT Chicago PMI index for August is set to provide a look at the regions production outlook. Last but not least, the US Pending Home Sales for July will be released at 14:00 GMT as a month-to-month change in percentage.
Gold falls below 1,310 on Tuesday
Daily chart: The yellow metal is slightly recovering on Wednesday, as it plunged and reached below the 1,310 level on Tuesday. However, the combined support provided by the weekly S1 at 1,310.87 and the lower Bollinger band at 1,306.82 somehow managed to slow down the fall of the commodity price. On Wednesday morning the rate had started day's trading session at 1,311, which is above the weekly S1 and just below the monthly S1 at 1,315.53, and the rate had been bouncing between the two of them the whole morning. Due to that and other technical factors, the bullion will continue to trade almost flat for the rest of the day.Daily chart
Hourly chart: The hourly chart for gold shows that as soon as the metal fell below the support provided by the 55 and 20-hour SMAs at 6:00 GMT on Tuesday, it began to fall with a geometrical increase of the rate of the decline. The lower Bollinger band got bent to the downside, and the SMAs followed the lead of the price to new lows, as it was not even slightly hindered by the support of the monthly S1 at 1,315.53. The plunge ended at 21:00 GMT just below the weekly S1 at 1,310.87, and the bullion began to slowly recover until it reached the monthly S1, which is now strengthened by the 20-hour SMA. The 20-hour SMAs position is one more factor, which contributes to the forecast of no changed for the bullion's price during today's trading session
Hourly chart
SWFX traders almost neutral on Wednesday
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 68.70%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 59.27% of positions are long.