Gold
Gold keeps pushing higher each day even after breaking below a strong support level and forming a lower low. Now price is near a rising trend line for a potential retest on the resistance. It is likely that the trend line will serve as a decisive level, so a break above or retracement lower will help determine the short term trend.
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Do we have something here on US oil?
- Strong US economic data could strengthen demand, + Middle Eastern tension
- COT data indicates institutional positioning is very bullish
Signal sent this morning in VIP.
- Nick
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Retail sentiment is mixed GBP and oil. The strongest short positions are still CHF with a few NZD pairs. It would be a clearer bullish sign for the pound if we started to see a shift in retail sentiment
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GBPAUD is the strongest of the GBP pairs today at +7. The score increased by 1 point as the trend reading may be turning around from a bearish to bullish move on the 1D timeframe. The majority of retail is short this pair.
Meanwhile, smart money is getting heavily long GBP this week as they increased their net long position by 6.4%. This was the highest percent change to the long side for the week. Investors will want to see a higher PMI number this Thursday to help fuel GBP strength.
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CAD/CHF Analysis
This week’s CPI report in Canada could add some volatility to the CAD pairs. CADCHF is one of the bullish biases on the EdgeFinder right now. What CAD bulls will want to see out of the latest CPI report is likely higher inflation on all fronts. The pair is up a little over 3% since the beginning of the year as the question of who will be the first to cut interest rates is still up in the air. Canada is one of the candidates of who is more likely to do so. Price action on this pair has not suggested any weakness to the Swiss Franc, however. Tuesday’s number will be further indication of that. Price has support around the 0.65128 level.
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On the AUDUSD pair, retail and COT sentiment has declined in the most recent week. Still, there is a net bullish stance from retail and a net bearish stance on COT.
-Frank
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Gold comes up today to a resistance level at the $2000 mark. This could be a potential short setup on the 1D timeframe if price rejects the highs. After this week's CPI numbers in the US, it is relatively clear why the metal is in a bearish state.
With PPI news tomorrow, gold may see another leg down towards the $1970-80s level. Higher PPI - which is expected- could drive the bearish gold sentiment to end the week.
-Frank
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AU is now at -6, one point higher than yesterday's -7 due to economic numbers from Australia's economic numbers. Employment change jumped by over 63,000 jobs, however, unemployment rate went up.
Both retail and COT are bearish this week as February is notoriously a bearish month for the pair. US had also lower retail sales m/m which bullishly affected this pair. PPI is expected to be higher this month, which would correlate with the higher inflationary number earlier this week.
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Retail sales missed, both headline and core. This caused a slide in the USD this morning.
However, manufacturing index data was hotter than expected, and unemployment claims beat.
Mixed sentiment, overall I remain bullish on the dollar for now and see possible pullback opportunities forming.
- Nick
The price forecast feature displays short term projections for each asset, based on the trend reading metric, and standard deviation. Please note, these are general projections, and may adjust as time passes or trends change.
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USOil
USOil rejects resistance around the $78-79s range and is heading lower to support. CAD CPI came in lower this morning which could be suggesting potential weakness in oil prices. Other arguments could be coming from a tighter market due to higher interest rates for longer. However, this just looks like a simple pullback as price is still hovering between two strong levels of support and resistance on the 1D timeframe.
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GBP/USD
GU is now the strongest bullish reading on the EdgeFinder. At +9, price has bounced from a significant level of support on the 1D timeframe and may look to retest the highs around 1.28. With PMI data around the corner, investors appear to be betting on higher number of purchasing managers and a stronger GBP. Up until Thursday, the buying pressure may continue.
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GBP is arguably more bullish than the dollar is now. Seeing the drastic change in COT sentiment this week is something to consider as institutions may be betting on a higher PMI number this Thursday.
The trend reading is also the only category that changed similarly to the GBPAUD pair. USD will also be reporting PMI on Thursday. The likelihood of higher numbers for US seem more probable than a lower number. This is due to the fact that US inflation was higher than expected. And it seems that COT is betting on a higher PMI number in the UK as well.
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Higher global PMI could impact the price of oil in a bullish way. It is now one of the strongest bullish readings on the EdgeFinder at +7. After oil's 10% retracement from the $78s, it appears that the commodity's retest might suggest a breakout higher.
Oil also caught another round of buying from smart money in Friday's report. Retail positioning is split down the middle which means it is continuing to fall while COT net long sentiment is increasing.
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On top of Canada’s inflation news, we also have FOMC in the US later on and PMI data in Europe and the UK Thursday.
Читать полностью…Retail sales was higher than last month in the UK suggesting more consumer participation and an increase in spending. This metric is often a good inflationary gauge on a country's economy, and although it can indicate growth, it can also point to higher inflation. And typically, higher inflation is a bullish sign for the currency. GBP may be stronger against certain currencies today
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US unemployment numbers came in today lower than last month's number. This is a good sign for the labor market, and the trend is still continuing lower.
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Unrelated to US, CHFJPY is the EdgeFinder's strongest bearish score. The pair was a bullish reading earlier this month before the score flipped. Japan has a slightly better labor situation than Switzerland as unemployment rate is coming down in Japan.
Japan has Switzerland beat in almost every category except retail sentiment and economy. February is historically the most bearish month for CHFJPY on a 10 year average.
-Frank
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The risk gauge flipped today from 25% fear to 25% greed indicating that despite the higher than expected inflation number from CPI this month, investors still like the risk-favored assets. NAS and US30 are both up today while the put-call ratio is falling.
- Frank
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