- 53% of all SWFX open positions are short
- The yellow metal remained almost unchanged by the end of the Election Day session
- The recent fluctuations were caused and dictated by the US presidential election
- Economic events to watch over the next 24 hours: FOMC Member's Fischer's Speech; Preliminary UoM Consumer Sentiment
The number of Americans filing for unemployment aid dropped more than expect last week, official figures showed on Thursday. According to the US Department of Labor, initial jobless claims fell 11,000 to 254,000 in the week ended November 4, down from the preceding week's 267,000 filings, while market analysts anticipated an increase of 2,000 to 267,000. This marked the 88th week of initial claims below the 300,000 level, the longest streak since 1973. The four-week moving average of claims increased 1,750 to 259,750 in the reported week. Thursday's data also showed that continuing claims grew 18,000 to 2,041,000 in the week ending October 29, whereas their four-week moving average declined to 2,039,500, the lowest level since July of 2000. After the release, the EUR/USD pair fell 0.09% to 1.0902, whereas it touched its highest level of 1.1298 on Wednesday after the results of the presidential race were announced. Last week's initial jobless claims together with the NFP report released on Friday have strengthened odds for a December rate hike, despite Donald Trump's surprise victory in the US Presidential elections, which sent shockwaves across the world.
Donald Trump's election as the 45th president of the United States sent shock waves across the world. His victory allowed the Republic Party to maintain the Senate, as well as win the White House. According to the final figures, in the presidential race of 2016 Trump won 276 electoral votes. Despite the post-election uncertainty, the US economy is set to continue its expansion at a rate of 2%. Moreover, analysts still expect a rate hike from the Federal Reserve in December, as markets are likely to stabilize ahead of the monetary policy meeting. Once the news broke, the Mexican Peso dropped more than 13%, hitting its overnight low, whereas the price of gold advanced 4.9% to $1,337.4 per ounce. European stock markets fell around 2.3%, compared to a 9% plunge after Britain's decision to leave the European Union. However, European stocks managed to finish higher, with the FTSE rising around 1% after falling 2% at the start of the trading day. Separately, the Energy Information Administration reported on Wednesday that US crude oil inventories increased 2.4 million barrels in the week ended November 4, following the preceding week's rise of 14.4 million barrels and surpassing the 1.3 million barrel gain forecast.
Upcoming fundamentals: FOMC speech and consumer sentiment
It is a banking holiday in Canada and the US, which means that we might not get data during the day from the US. However, there are two events, which will affect the strength of the US Dollar. At 14:00 GMT FOMC Member Fischer is set to give a speech and at 15:00 GMT keep an eye out for the Preliminary UoM Consumer Sentiment index.
Gold falls to the 1,250 once more
Daily chart: It seems that the markets have fully returned to the pre-election levels, as the yellow metal was in rebound after finding support in the 1,250 level, which is the 38.20% Fibonacci retracement of the metal's historical high and low levels. Moreover, the bullion had additional support during Friday morning, as the commodity price managed to move above the second weekly S2, which is located t 1,257.46. It is likely that the bullion will surge by the end of the day, as the 1,250 level's support has not been passed no matter how many attempts were made.Daily chart
Hourly chart: The hourly chart for the yellow metal reveals that the bullion began to fall, when it could not break the resistance put up by the cluster made up of the 20, 55, 100 and 200-hour SMAs near the 1,286 level. The bullion began to fall at 9:00 GMT and continued just that until 20:00 GMT. At 20:00 GMT the metal encountered the distant but more or less together working support levels of the 1,250 and the second weekly support at 1,257.46.
Hourly chart
Traders remain bearish
OANDA open long positions have almost remained unchanged and are at 78.17%, compared to 78.62% on Thursday. SAXO bank traders remain long, and have increased their bullish positions even more, as 71.90% of traders were lone on Friday, compared to 65.57% the previous session.