Summary:
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Uni Mich consumer sentiment: 99.0 vs 100.4 exp
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USD set for sizable weekly declines
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Gold remains above Thursday’s breakout level
The final data of note out this week comes from the US with the University of Michigan consumer sentiment disappointing a little, and coming in below forecast. The index for October came in at 99.0 compared to consensus forecasts of a 100.4 print, while the prior reading was also subject to a downwards revision and now stands at 100.1 from 100.8 previously. Looking back today’s number is still pretty high historically speaking, but it does represent the third time in the last 4 releases that it has come in below forecasts.
Even after the latest reading came in below forecast, the Uni Mich consumer sentiment remains at relatively high levels and close to the 100 mark. Source: Bloomberg
On the whole it’s not been a great week for the US dollar, with the buck pulling back against the majority of its peers. The biggest gainer is the Turkish Lira, which has been boosted by over 3% on hopes of the the release of US pastor Andrew Brunson - The release has been confirmed in the last hour. Other EM currencies such as the Brazilian Real and South African Rand are also enjoying strong gains of more than 2%. The Canadian dollar and Mexican Peso are the biggest losers as the enthusiasm behind the newly agreed trade agreement (USMCA) from the previous week has waned.
The US dollar is trading lower on the week on balance with gains seen against only a handful of its peers. Source: xStation
Yesterday’s lower than expected US CPI release caused a sharp move higher in the precious metals complex with Gold, Platinum and Silver all posting solid daily gains. Gold in particular could be worth keeping an eye on as the market rose to a 2-month high and in doing so made a potentially key break higher. The size of the D1 candle will draw attention to the eye and the strong impulse saw price take out 2 prior resistance levels around 1208 and 1215.50. These two levels could now be seen as offering support if price pulls back. Given the previous 2-3 months have been in a fairly narrow range the break to the upside may be considered a big development and it now paves the way for a larger rally. A symmetrical target from the breakout of 1215.50 would come in around 1270 while the more conservative 1256 can be arrived at from assuming the breakout came at 1208.
Gold made a potentially key breakout yesterday and could now be set for a sustained rally higher. Source: xStation
