PMI data out of the Eurozone disappointed yesterday, especially out of the manufacturing sector. This pointed towards more weakness for the global economy. Trade worries have increased after the Chinese delegation cut its US trip short and returned home. This has provided a boost to gold as traders are once again seeking safe haven. After support around the $1,500 mark pushed this precious metal higher, will bullish momentum increase and push gold above resistance? Today’s fundamental analysis will take a look at the upside potential in this commodity and weight the downside risk.
Today’s German IFO data could provide an increase in volume, especially if it follows yesterday’s PMI data with a downside surprise. US housing as well as consumer confidence will be released later in the session together with a regional manufacturing index. How will this impact price action? The US consumer has remained resilient during the economic downturn so far, how much more can be borrowed? Will today’s data further accelerate gold to the upside? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month in profits.
Here are the key factors to keep in mind today for Gold trades:
- Australian ANZ Roy Morgan Weekly Consumer Confidence Index: The Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of September 22nd was reported at 110.1. Forex traders can compare this to the Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of September 15th which was reported at 109.3.
- Japanese Nikkei Manufacturing PMI: The Preliminary Japanese Nikkei Manufacturing PMI for September was reported at 48.9. Forex traders can compare this to the Japanese Nikkei Manufacturing PMI August which was reported at 49.3.
- Japanese Leading Index and Japanese Coincident Index: The Final Japanese Leading Index for July was reported at 93.7 and the Final Japanese Coincident Index was reported at 99.7. Forex traders can compare this to the previous Japanese Leading Index for July which was reported at 93.6 and to the previous Japanese Coincident Index which was reported at 99.8.
- French Business Survey: The French Business Survey for September is predicted at 102. Forex traders can compare this to the French Business Survey for August which was reported at 102.
- German IFO: The German IFO Business Climate Index for September is predicted at 94.5. Forex traders can compare this to the German IFO Business Climate Index for August which was reported at 94.3. The German IFO Current Assessment Index for September is predicted at 97.0. Forex traders can compare this to the German IFO Current Assessment Index for August which was reported at 97.3. The German IFO Expectations Index for September is predicted at 92.0. Forex traders can compare this to the German IFO Expectations Index for August which was reported at 91.3.
- UK Public Sector Net Borrowing: UK Public Sector Net Borrowing for August is predicted at £6.6B and UK Public Sector Net Borrowing excluding Banking Groups at £7.1B. Forex traders can compare this to UK Public Sector Net Borrowing for July which was reported at -£2.0B and to UK Public Sector Net Borrowing excluding Banking Groups which was reported at -£1.3B.
- US House Price Index: The US House Price Index for July is predicted to increase by 0.3% monthly. Forex traders can compare this to US House Price Index for June which increased by 0.2% monthly.
- US S&P/Case-Shiller Composite 20: The US S&P/Case-Shiller Composite 20 for July is predicted to increase by 0.10% monthly and by 2.15% annualized. Forex traders can compare this to the US S&P/Case-Shiller Composite 20 for June which increased by 0.04% monthly and by 2.13% annualized.
- US Consumer Confidence: US Consumer Confidence for September is predicted at 133.0. Forex traders can compare this to US Consumer Confidence for August which was reported at 135.1.
- US Richmond Fed Manufacturing Index: The US Richmond Fed Manufacturing Index for September is predicted at 1. Forex traders can compare this to the US Richmond Fed Manufacturing Index for August which was reported at 1.
Should price action for Gold remain inside the or breakout above the 1,510.90 to 1,526.50 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,521.00
- Take Profit Zone: 1,616.50 – 1,638.95
- Stop Loss Level: 1,501.00
Should price action for Gold breakdown below 1,510.90 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,498.50
- Take Profit Zone: 1,457.70 – 1,472.00
- Stop Loss Level: 1,510.90
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