Fundamental data on gold suggests strength for the metal. Because it usually thrives off weak economic and labor data, seeing all three measurements come in gold's favor, the metal has a bias to go up. It's important to watch price action after the steep run higher. The fundamentals back gold, but it may experience some more consolidation until buyers step back in.
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USOil's score saw a steady decline from the strong bullish reading. The score went from +6 to a -6 suggesting that the commodity is going lower. Smart money reported late but indicated that speculators were selling last Tuesday.
The majority of retail is long which is more confirmation of more downside. As inflation declined, so did oil's score on the EdgeFinder. And lower jobs numbers from the latest NFP report suggest a decline in oil demand. -Frank
AUDUSD is now a neutral rating on the EdgeFinder, marking a considerable score flip from the strong bearish reading it had in October. Smart money has bought the Aussie going into this week at a greater rate than the dollar.
However, retail is majority long on this pair which has a historically bearish month on the 10-year average. If price can break from the 0.65500s range, it could signify that the rally is turning into an uptrend for a longer term run higher.
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📈 Bought at: 4176.78 (Floating +3231.10 pips 🔥)
🚫 Stop: 4465.94 (Trailed: +2891.60 pips above entry)
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SPX500
Lower CPI combined with higher jobs numbers this quarter was everything the index bulls wanted to see. As we approach the final stretch of the year, investors were expecting another rate hike from the Fed. However, now that the latest data on inflation is out, we might not be seeing the hike everyone expected. We could be at the end of the Fed’s interest rate journey as lower inflation suggests easing up on the monetary policy. The SPX500 broke several levels of resistance, and now looks to be wanting to test the highs around $4516 and $4541. -Frank
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Retail is now heavily bullish on oil, AUDUSD, USDCHF and UK100. EU and gold are mixed, however. And the US indices are largely shorted by the crowd.
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EURUSD is no longer a strong bearish reading on the EdgeFinder scanner. Retail is still mixed for the time being, and COT data is late to report the most recent activity from smart money.
Some things to watch closely will be the trend reading, COT, and CPI data (inflation) that will update this week this Tuesday. If we see a lower Core CPI and CPI y/y, the EdgeFinder will change its score to a stronger bullish reading on the pair. -Frank
Now that the CFTC has released the latest data on smart money, here is an overview of where they were looking last Tuesday. They had strong positions on the NAS100 to the long side along with AUD. The heaviest shorts from last week were SPX500, NZD and CAD.
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S&P, GBPCAD, AUDJPY - all 3 moved very nice this week so far.
Risk ON assets performing well!
Reminder: risk on means higher risk / higher reward assets tend to outperform risk off assets (lower risk/lower reward)
With the fed looking like it is done with interest rate hikes, risk on assets are soaring! Congrats to those who have caught the run with us.
- Nick
Unemployment claims came out higher than expected in the US which is likely causing this rally in gold's price. The metal is still up against resistance on the 1D timeframe in the $1970s, and additional resistance is on a falling trend line.
As yields fall on the day, gold catches a swing despite yesterday's candle closed in a bearish way. If price does pullback from here, it may come down to test the $1950s or the lows around $1930s.
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Today, we are not seeing many strong setups on the EdgeFinder except for a number of bullish readings. NAS100 is one of the bullish readings along with several risk-on pairs. This is an important sign that the scanner is brining since most risk-on pairs were in the bearish camp for many days. NAS is up against some significant resistance that may call for a pullback in this uptrend. Some levels of support we can look to are around $15,617 and the $15,300s. -Frank
Читать полностью…USD/JPY is down in a big way today after the CPI numbers this morning as well. This news has caused major dollar bearishness on the day, and it seems that it will likely continue. This is because all of the fundamental metrics are lining up with USD weakness: higher NFP, lower wage growth, slower CPI. Seeing a stronger jobs market and lower inflation is what turns investors away from the dollar. The pair could come down to test support around the trend line on the 1D timeframe.
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Although gold tends to perform better in high inflationary markets, the metal also finds demand from a weaker dollar. Lower inflation will ultimately weaken USD bullishness as investors will look to rick-on pairs as well.
Gold is no longer a strong bullish score on the EdgeFinder. In fact, it is now moving towards the bearish camp due to a stronger US economy, lower bond yields and the recent trend lower. Overall, this asset is mixed, but CPI will be a huge mover on the score and the price of gold.
NAS100 is now a +5 on the scanner which is a bullish reading. The index saw an incredible run last week as price broke above resistance on the 1D timeframe and is now hovering just above support.
Similar to EURUSD, if the CPIs come in lower, we can expect the market to react in a bullish manner as it is in compliance with the Fed's goal to reach their target inflation on 2%. -Frank
Letting a winner run! Stop loss is locked in profit, my goal is to hold through CPI.
If CPI comes in much hotter than expected, I will close for a profit.
If CPI comes in cooler than or as expected, I will look to trail stops further into profit.
- Nick
Economists are expecting lower numbers on inflation data tomorrow in the US. After seeing higher NFP and slower wage growth, this will be a key metric in figuring out whether or not the Fed will decide to hike rates or keep them the same. -Frank
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