Gold finds some good support around the rising trend line on the 1D timeframe. This bullish hammer candle suggests another turn to the upside if we can see a close like this. Gold seems to be reacting to the GDP number in a way that reflects worse economic conditions.
What we saw was a higher GDP than expected. However, GDP growth declined by 0.3% from last month. So investors may be weighing the impact as to what's more meaningful: a 0.1% beat in forecasts or a 0.3% miss from last month's report.
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Gold
The metal is still a strong bullish score on the EdgeFinder at +9 due to weakness in the latest economic readings. A general slowdown in US performance combined with growing COT sentiment now has gold at the top bought asset from smart money. Price is still in a strong uptrend, but is experiencing a period of consolidation. Tomorrow’s GDP number will impact gold’s score in a positive way if there is further slowdown in output this month. We need to continue to monitor how high interest rates impact the US economy for the rest of the year to understand if it is recession-prone and if gold is a strong hedge against the dollar/indices. -Frank
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Читать полностью…Gold
Gold us up today as consumer confidence is on the rise. Price is still above a rising trend line, but it may have entered a period of consolidation in the short run. The metal is now the most longed asset on the EdgeFinder as price slowly creeps higher in the last few trading days. Gold bulls would likely want to see a lower GDP number in the US.
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Читать полностью…EURUSD Daily Chart -
Price seems to be pulling back a bit currently, but remains in an uptrend. I am looking for possible pullbacks, with confirmation from the EdgeFinder.
USD weakness could continue, as we've seen a trend towards slowing economic data and cooling inflation.
With NFP lower and unemployment claims coming in much higher than expected over the last several weeks, investors need a lower CPI number next week in order to keep a bullish bias on the indices. If not, gold may be seen as the new buy for 2024 as the Fed has to battle with worse economic conditions and higher inflation.
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Retail is now long crypto, metals, GU and Russell. Mixed positions are in gold, UJ, USDCAD, US30 while EU, NAS, and SPX500.
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The stock market has been very resilient towards a cooling jobs market and the fears of "higher for longer" interest rates. This week and the weeks to come will be full of heavy earnings news as NVDA is to report on May 22. This slow melt up could just be a reaction to the less hawkish Fed tone and earnings season.
However, upside seems limited now that we are back near all time highs. With CPI in focus, it could serve as the single most pivotal indicator of risk sentiment in the market. We already have the numbers for NFP, so a higher or lower CPI is going to impact the indices. Higher CPI could likely cause a sell off in the stock market while a lower CPI could indicate a reemergence of risk appetite.
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The RUSSELL is now our strongest bearish reading on the EdgeFinder. At a -10, there are almost no bullish signals for the small cap index. This month is historically a positive month, and it is still up for the month. However, our scanner is telling us why the index could move lower.
For one, we are likely to have higher rates for longer which affects the small caps more than larger caps like the SPX, NAS or US30 indices. Slower economic growth is going to take a toll on the smaller companies as well. Although GDP beat expectations, we will take a look at what is really going on in the market soon.
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USD/CAD
This pair is now the strongest bearish setup on the EdgeFinder despite a bullish looking setup on the 1D timeframe. Price seems to be sandwiched between a wedge pattern while sitting on a significant level of support. If we see a higher GDP number on Thursday, it may even be bullish news for the dollar as the Fed may keep the sentiment for higher rates for longer.
-Frank
EUR/USD
EU is now a strong bullish score on the EdgeFinder at +13. Price is now at resistance level which is a double top. A higher GDP number may be bullish for the pair because EURUSD tends to be more correlated with the US indices. If price is able to break the double top on the 1D timeframe, it may be able to test a higher level around 1.0942. -Frank
Took profits on my Gold trade on Wednesday!
The fundamentals remain strong on Gold. I am currently still looking for setups.
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- Nick
NASDAQ, Daily Chart:
With cooling inflation, the market continues to look forward to rate cuts this year. Boosted by strong tech earnings (especially NVDA), the market looks short term a bit overbought, but longer term quite bullish at the time being.
I am looking for possible pullback entries to add longs.
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NVDA Daily Chart:
Nvidia is reminding us all today why it is still king of the AI rally.
In their earnings report yesterday, they saw a significant beat in both revenue & net income share price.
Share price continues to drive higher this morning!
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Gold is still looking bullish according to our sentiment indicator between retail and smart money. COT remains majority bullish while the crowd is selling the metal this week.
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GBPUSD is now a neutral reading on the EdgeFinder due to several factors. There is mixed sentiment in the pair's fundamental score and a clear bearish bias in the sentiment score. Retail is now over 60% long this pair while COT is buying dollar and selling GBP.
Similar to the US indices, a higher CPI is likely not going to be bullish for GU. The BoE was decidedly unchanged in interest rates, so now it depends on the next inflation data for both the US and UK.
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Gold is now at +10 as the trend reading suggests further upside and retail is no longer majority long. Some reasons why gold is not moving so much this week is that 1: there is not a lot of major news in the US, and 2: investors could be waiting for CPI data.
Next week's inflation report could cause an increase in volatility for USD-related assets such as gold. If we look at the latest jobs report which showed a cooling in the market after NFP's dramatic miss in expectations, a higher or unchanged CPI could reignite stagflation fears. Gold tends to thrive off this sort of economic scenario in the US.
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Gold
Gold is still hovering at a consolidation zone around $2,300 as the EdgeFinder gives the metal a favorable bullish score at +6. The dollar and yields are on the rise today after holding a significant support level which could be keeping gold’s price at bay for the time being. If gold breaks under the support levels drawn on my 1D timeframe chart, it may start to change from it’s upside trend. A resistance level needed to be broken is at $2,350.