PMI data in the US is currently above 50 in the manufacturing and services sector. Good news overall for the US economy, but China may show otherwise. China's economic health is a strong determinator of how the global demand will change. Any weakness in purchasing managers' sentiment could hurt the risk-favored assets.
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With indices still being the most sold assets, it's clear that retail traders are hoping for any kind of drop in price. Most of the USD pairs are mixed as oil, AUDUSD, and USDCHF remain at the most bought.
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Smart Money is getting increasingly long on gold while retail is continuing to short the metal. Price action, however, has been relatively choppy as it battles between the $1980s and the $2020s.
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Gold is down on the day before US PMI which could be an indication that investors are anticipating a higher number this month. COT also sold gold in last week's report possibly hoping for a stronger dollar reading in the next week or so.
This is also a technical indicator on the 1D timeframe for gold to test resistance on a rising trend line. If price cannot break above this level, it may look to retrace down towards the $2000s level.
Watching oil this morning...
Long signal in profit!
On a break of the highs, I'll look to trail stops. - Nick
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Out of GBP pairs, this one is the strongest bullish score. Price is clearly in a wedge pattern right now, and it seems like price wants to move higher to complete the move to the top. The current score is +8 on the EdgeFinder largely from the help of COT change from last week. Smart money’s net positional change came in much higher than other currencies in the wake of PMI data on Thursday. Perhaps investors are betting on a higher PMI number this month and a stronger GBP.
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The NAAIM Exposure Index is getting increasingly more bullish in terms of money flow. As the index nears 100%, it means that hedge funds are near being completely long in the stock market while the dollar index falls through a strong supportive trend line. Seeing exposure this high before Fed meeting minutes today suggests that institutions are betting on risk-favored assets rather than dollar strength.
- Frank
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Soon to be a new addition to the EdgeFinder are GDP data around the world. This chart is designed to show the rate of change each month and even compares it to the previous year. So now users can easily tell not only if GDP is showing growth or contraction from the previous month, but also from last year's performance.
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Metals and oil saw the most attention from smart money last week. Indices were being sold along with USD's minor change to the downside.
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Oil's score is now a +6 on the EdgeFinder as the trend reading takes the score one point higher. COT report shows more interest in oil with a 1.86% change to the long side. Contrarily, retail is still majority long biased which could counteract COT sentiment.
The trend reading changed by 1 point to a +2 overall score in trend. Since the beginning of the year, oil has been mostly trading sideways, so a strong trend reading score may suggest that an uptrend is just around the corner.
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USOil performs better in higher inflationary environments along with economic growth. With PCE and purchasing managers on the horizon, oil investors would like to see a higher price change combined with increased sentiment for growth.
In other words, PCE and PMI coming in hotter would likely propel oil's price forward. The commodity bounced off a strong level of support on the 1D timeframe but continues to remain rangebound between the 75.50s and 79.20s.
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Gold is now inching closer to the bullish range on the EdgeFinder's score after being in the negatives for over a week. China's PMI expectations are slightly lower than the previous month suggesting a minor increase in economic contraction as COT seems to be buying up the metal in the reported positioning for last week.
However, the US is also reporting PMI on Friday in manufacturing suggesting a higher rate. So there is already some mixed sentiment going into gold's direction. A lower PMI would likely help gold's price in both economies, but it's harder to gauge than oil.
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The trend in Manufacturing PMI has shown some increase as the number is now above 50 indicating economic growth. The actual results came in higher for manufacturing and lower for services at 51.5 and 51.3 respectively. Mixed data may not have a tremendous impact on the USD however, gold, USD and NAS100 are having a positive initial reaction to this news.
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Retail is strongly bearish on the indices while being mixed on gold and the major USD pairs. USOil and AUDUSD are the assets that retail traders are buying. Today's retail sentiment showed a change in GU retail positioning to less bullish as now nearly 60% of traders are bearish this pair.
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Indices are getting a weaker reading on the EdgeFinder at +4. Indices are up regardless of the PMI data coming out and this could likely be due to earnings in the semiconductor sector. Nvidia reported their quarterly earnings last night and beat all analyst expectations.
Forward guidance was also another helpful factor for the stock's price as AI sales demand has greatly increased business in that area of the market. It is likely that NAS100 will be carried more by this news than PMI data.
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GBPUSD is now a +9 on the EdgeFinder. This strong bullish reading is helped out by the recent change in the trend reading category that went up to a +2 overall suggesting a strong uptrend. UK PMI data came in almost unchanged except for a slight tick up in manufacturing.
The pair is now reacting negatively towards this news. If the US reports higher than expected PMI, the pair could react more negatively. However, a weaker reading in US PMI data could cause the opposite reaction for the pair.
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Today's news for PMI in Europe, UK and US
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What are your thoughts on GBPJPY? From a fundamental perspective, here’s why GBPJPY is looking bullish 🏆
Читать полностью…Contrary to NAAIM, there has been a considerable decrease in bullish investor sentiment in the AAII Index. It's currently reading 42.2% bullish from 49% two weeks ago. The survey will update today at 11:59 p.m. and we will see how sentiment changed from the current rate of 42.2%. Any decrease in this number is not a bullish sign for the forward-looking indices market in the US.
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Is gold going to breakout higher? Smart money is seeming confident in their bullish bias. What do you think?
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When it comes to the question of which central bank will cut first, it seems that Canada may be before the US. Their inflationary target is now in the target range of 1-3% while the US is just above it. The inflation score on USDCAD is still at +1 due to USD having a higher inflation rate than CAD even though both currencies are seeing CPI rate decline.
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