Gold: 1,365 Support Broken

Sometimes markets just perform beyond your expectations. Gold was already looking bearish following the break of 1,385 yesterday, but we thought that it “would be hard” for 1,365 to be broken in the short run as Stochastic readings would have been within the Oversold region when the 1,365 – 1,375 consolidation zone is breached. It seems that we got 2 out of 3 correct: prices did trade lower towards the 1,365 – 1,375 zone, stochastic readings were Oversold when that happened, but surprisingly price did manage to unlock the “Hard Difficulty” achievement by slicing through 1,365, reaching a low of 1,358 yesterday. 

Prices rebounded after hitting the 1,358 low, sending us back up to around 1,365. This give us the ideal short-term bearish scenario described yesterday – where price will consolidate under 1,365 before finally pushing out lower which will help to extend the bearish reversal pattern seen on the Weekly Chart. 

Hourly Chart

  XAU/USD

All this sounds wonderful, doesn't it, but bears shouldn’t pop the champagne just yet, as bulls haven't rolled over and died. Prices pushed sharply lower following Obama’s official address to the American public on Syria. He indicated that diplomacy is the preferred route, and therefore he's postponed the Congressional vote for military involvement. Furthermore, even if diplomacy failed, Obama promises that no “American boot” will land on Syria, implying that there will not be a long, drawn-out messy war, but merely surgical strikes against chemical weapons storage/production facilities in Syria. 

The resulting decline in gold was promising, with prices pushing below yesterday’s swing low. But unfortunately for the bears, a new bearish cycle did not take flight, with bulls sending price quickly back up towards 1,365 once again.

Nonetheless, overall bearish pressure remains strong under 1,365. Price is currently being pushed down lower again, and with Stochastic readings being higher than yesterday’s levels, we have a broader space for the current bearish cycle even if we start moving lower from here. Ideally we should see Stochastic readings push up further--higher within the Overbought region before heading lower again, but that should not impede the bears' ability to move towards the descending trendline and finding support around 1,330 – 1,345 in the short-term.

Dollar mixed as Obama speaks on Syria

Investing.com - The U.S. dollar traded mixed against most of its major rivals during Wednesday’s Asian session as U.S. President Barack Obama addressed the nation regarding the situation in Syria. 

In Asian trading Wednesday, EUR/USD rose 0.05% to 1.3274 after Obama said Bashar al-Assad’s regime was responsible for using chemical weapons on Syrian citizens. 

"In the days leading up to August 21st, we know that Assad’s chemical weapons personnel prepared for an attack near an area where they mix sarin gas. They distributed gas masks to their troops. Then they fired rockets from a regime-controlled area into 11 neighborhoods that the regime has been trying to wipe clear of opposition forces. Shortly after those rockets landed, the gas spread, and hospitals filled with the dying and the wounded," said Obama in his speech. 

GBP/USD inched up 0.01% to 1.5734 as sterling continues to trade near multi-month highs against the greenback. On Wednesday, the U.K. is to release government data on the change in the number of unemployed people, the overall unemployment rate and average earnings. 

USD/JPY fell 0.05% to 100.35 after the Bank of Japan said the country’s corporate goods price index rose 2.4% in August after a 2.2% increase in July. Analysts expected the August increase of 2.4%. 

In a separate report, Japan’s Ministry of Finance said the BSI large manufacturing conditions reading soared to 15.2 in the second quarter following a first-quarter reading of 5. Analysts expected the survey of manufacturing conditions to read 7.2 for the second quarter. 

USD/CHF inched up 0.02% to 0.9352 while USD/CAD fell 0.05% to 1.0345 after the American Petroleum Institute said U.S. oil inventories fell by 2.9 million barrels last week. Analysts expected a draw-down of 2 million barrels. Gasoline stockpiles increased by 195,000 barrels while distillate supplies climbed by 807,000 barrels. 

AUD/USD fell 0.14% to 0.9301 while NZD/USD lost 0.12% to 0.8059 on weak appetite for riskier currencies. The U.S. Dollar Index inched down 0.02% to 81.79.

GBP/USD remains near 7-month highs on U.K. data

Investing.com - The pound remained near seven-month highs against the U.S. dollar on Wednesday, as the release of upbeat U.K. employment data and expectations for the Bank of England to lower interest rates sooner than expected continued to support demand for sterling. 

GBP/USD hit 1.5826 during U.S. morning trade, the pair's highest since February 8; the pair subsequently consolidated at 1.5795, gaining 0.40%. 

Cable was likely to find support at 1.5717, the session low and resistance at 1.5860. 

The pound strengthened earlier, after the Office for National Statistics said the rate of unemployment in the U.K. ticked down to 7.7% in July from 7.8% in June. Economists had expected the unemployment rate to remain unchanged.

Last month, the BoE pledged to keep interest rates on hold at current record low levels until the unemployment rate falls below 7%, something that bank does not see for another three years.

The ONS said the number of people claiming unemployment benefits fell by 32,600 in August, better than expectations for a decline of 22,000 people.

The previous month’s figure was revised to a drop of 36,300 people from a previously reported decrease of 29,200. 

Sterling was higher against the euro with EUR/GBP shedding 0.23%, to hit 0.8414. 

In the euro zone, the head of the European Commission José Manuel Barroso said in a speech on Wednesday that a recovery is in sight and reiterated his call for the implementation of banking reforms, starting with the 'single supervisory mechanism'.

GBP vs USD

Looking at the daily chart by using fibonacci retracement analysis, the uptrend seems to hit the  resistence line at 1.57400, in my opinion , trader should go sell starting tomorrow.

Dollar at 1-1/2 month highs vs. yen

Investing.com - The dollar rose to one-and-a-half month highs against the yen on Tuesday as investor demand for riskier assets was boosted as the prospects for a U.S. military strike against Syria faded.

During U.S. morning trade, the dollar rose to the highest since July 25 against the yen, with USD/JPY advancing 0.80% to 100.37.

Market sentiment was bolstered after Syrian Foreign Minister Walid al-Moallem said Tuesday that his government agreed to a Russian proposal to place its chemical weapons under international control. 

U.S. President Barack Obama has said he would put plans for a military strike against Syria on hold if the country agreed to relinquish control of its chemical weapons.

Investor confidence was also boosted after reports on industrial production and retail sales from China added to signs that the world’s second largest economy is recovering from a slowdown.

Data released on Tuesday showed that Chinese retail sales rose unexpectedly in August, while Chinese industrial production rose more than forecast last month.

Elsewhere, the euro was steady close to eight day highs against the dollar, with EUR/USD edging up 0.05% to 1.3261.

In the euro zone, data on Tuesday showed that the recession in Italy is deeper than had been previously thought.

The economy contracted by 0.3% in the second quarter, worse than the initial estimate of a 0.2% contraction, bringing the annualized rate of contraction to 2.1% from the initial estimate for a  2% contraction.

The pound rose to three-month highs against the dollar, with GBP/USDrising 0.16% to 1.5719.

The dollar pushed higher against the Swiss franc, with USD/CHF rising 0.27% to 0.9349.

Elsewhere, the greenback was broadly lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD climbing 0.77% to 0.9298, NZD/USD gaining 0.50% to 0.8056 and USD/CAD down 0.24% to 1.0350.

In Canada, a report showed that housing starts declined slightly more than expected in August, to 180,300 units in August from 193,000 units in July. Economists had forecast a decline to 190,000 units.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.05% to 81.86. 

Gold’s losses deepen after Syria accepts Russian weapons plan

Investing.com - Gold futures came under heavy selling pressure on Tuesday, as the odds of a U.S. military strike against Syria eased after Syria’s foreign minister said his country will accept Russia’s proposal to put chemical weapons under international control.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,363.70 a troy ounce during U.S. morning hours, down 1.65%. 

Gold traded in a range between USD1,362.90 a troy ounce, the daily low and a session high of USD1,391.20 a troy ounce. The December contract ended Monday’s session little changed at USD1,386.70 a troy ounce.

Gold futures were likely to find near-term support at USD1,356.00 a troy ounce, the low from August 22 and resistance at USD1,415.00, the high from September 4.

Gold prices tumbled after Syrian Foreign Minister Walid al-Moallem said that his country will agree to turn over its chemical weapons to international control, easing concerns over a U.S. military strike against Syria.

U.S. President Barack Obama said Monday that he would put plans for a military strike against Syria on hold if the country agrees to a Russian proposal to place its chemical weapons under international control.

Gold prices surged to a three-and-a-half month high of USD1,433.50 a troy ounce on August 28 as safe-haven buying picked up amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.

Meanwhile, investors continued to speculate over the timing of the Federal Reserve’s widely expected reduction in monthly bond purchases following last week’s weaker-than-forecast U.S. jobs report.

Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

The central bank is scheduled to meet September 17-18 to review the economy and assess policy.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

Elsewhere on the Comex, silver for December delivery plunged 2.8% to trade at USD23.05 a troy ounce, while copper for December delivery inched up 0.15% to trade at USD3.283 a pound.

The red metal was supported after official data released earlier showed that Chinese industrial production rose 10.4% in August, beating expectations for a 9.9% increase and accelerating from a 9.7% gain in July.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Crude oil futures tumble after Syria accepts Russian proposal

Investing.com - Crude oil futures tumbled on Tuesday, after Syria’s foreign minister said Syria will accept Russia’s proposal to put chemical weapons under international control.

On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD107.60 a barrel during U.S. morning trade, down 1.75%.

New York-traded oil futures held in a range between USD107.56 a barrel, the daily low and a session high of USD109.01 a barrel. The October contract settled 0.9% lower at USD109.52 a barrel on Monday.

Oil futures were likely to find support at USD106.55 a barrel, the low from September 3 and resistance at USD110.70 a barrel, the high from September 6.

Oil prices tumbled after Syrian Foreign Minister Walid al-Moallem said that his country will agree to turn over its chemical weapons to international control, easing concerns over a U.S. military strike against Syria.

U.S. President Barack Obama said Monday that he would put plans for a military strike against Syria on hold if the country agrees to a Russian proposal to place its chemical weapons under international control.

While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.

Oil prices surged to a 27-month high of USD112.22 a barrel on August 28 amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery dropped 1.6% to trade at USD111.89 a barrel, with the spread between the Brent and crude contracts standing at USD4.29 a barrel.

London-traded Brent prices fell to a session low of USD111.86 a barrel earlier, the weakest level since August 27.

Crude oil futures decline as traders monitor U.S.-Syria conflict

nvesting.com - Crude oil futures were lower during U.S. morning hours on Monday, as investors awaited further clarity on possible U.S.-led military action against Syria.

On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD109.88 a barrel during U.S. morning trade, down 0.6%.

New York-traded oil futures held in a range between USD109.58 a barrel, the daily low and a session high of USD110.45 a barrel.

The October contract settled 2% higher at USD110.53 a barrel on Friday, the highest closing price since May 3, 2011.

Oil futures were likely to find support at USD106.55 a barrel, the low from September 3 and resistance at USD112.22 a barrel, the high from August 28.

U.S. lawmakers are scheduled to reconvene Monday after a five-week summer-break, with a vote on taking military action against Syria expected by the end of the week.

President Barack Obama has scheduled interviews with all major U.S. television networks for broadcast later Monday as he tries to persuade members of Congress to vote for a military strike.

Political analysts warned that the President lacks broad-based support, as lawmakers fear the country will be dragged into a new Middle East conflict.

U.S. Secretary of State John Kerry said earlier that Syrian President Bashar al-Assad could prevent a U.S.-led military strike by handing over all chemical weapons within the next week.

On Sunday, Assad denied authorizing the August 21 chemical weapons attack, which killed over 1,400 people, hundreds of them children.

Russian President Vladimir Putin warned the U.S. against launching military action against the Syrian government without U.N. approval on Friday.

Speaking at a news conference following the Group of 20 summit in St. Petersburg on Friday, Putin said Russia would "assist" Syria if the country is attacked.

While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.

Market players are also concerned about the involvement of Iran and Saudi Arabia in such a conflict. The two countries are major oil producers.

Oil prices surged to a 27-month high of USD112.22 a barrel on August 28 amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.

Meanwhile, market players digested a raft of economic data out of China, the world’s second largest economy.

The Chinese National Bureau of Statistics said earlier that consumer price inflation rose 2.6% in August, in line with expectations and slowing from 2.7% in July.

The inflation report came one day after data showed that China’s trade surplus widened to USD28.6 billion from a surplus of USD17.8 billion in July, compared to estimates for a surplus of USD20 billion.

Chinese exports rose 7.2% from a year earlier in August, beating expectations for a 6% increase and following a 5.1% gain in July.

However, imports of crude oil fell to a six-month low of 21.43 million tonnes in August, 17.9% lower from July.

Investors continued to speculate over the timing of the Federal Reserve’s widely expected reduction in monthly bond purchases following Friday’s weaker-than-forecast U.S. jobs report.

The Department of Labor said that the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists and jobs growth for the two previous months was also revised lower.

The report sparked renewed uncertainty over whether the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery dropped 1.3% to trade at USD114.63 a barrel, with the spread between the Brent and crude contracts standing at USD4.75 a barrel.

Obama 'could pause Syria plans'

US President Barack Obama has said he will put plans for a US military strike against Syria on hold if the country agrees to place its chemical weapons stockpile under international control.

But he said he was sceptical the Syrian government would follow through.
As the US Congress debates authorising an attack, Russia on Monday proposed Syria relinquish its chemical weapons.
The US accuses Damascus of war crimes including use of chemical weapons, allegations denied by the regime.
The US president on Monday gave a series of television interviews aimed at building support among a US Congress and public wary of new military action in the Middle East.

The president maintains a limited strike is needed to punish Syrian President Bashar al-Assad's regime for the use of chemical weapons and to deter it from using them again.

"I want to make sure that norm against use of chemical weapons is maintained," Mr Obama told ABC News.
"That's in our national security interest. If we can do that without a military strike, that is overwhelmingly my preference."
Asked by Diane Sawyer of ABC News if he would put plans for an attack on pause should Mr Assad yield control of his chemical weapons, Mr Obama answered: "Absolutely, if in fact that happened."
Mr Obama said he would continue to press the US Congress to back a resolution authorising him to take military action against Syria, but he implied the timeline for action had shifted.
"The stakes are high, but they are long term," he said, adding that he did not "foresee a succession of votes this week, or any time in the immediate future".

On the ground, the Syrian conflict is still raging

But he added: "I don't think that we would have gotten to this point unless we had maintained a credible possibility of a military strike, and I don't think now is the time for us to let up on that,'' he said.
US senators had been expected to take a first vote on the issue on Wednesday, but the test vote on the legislation was postponed on Monday by Senate Majority Leader Harry Reid who cited "international discussions'' as a reason for the delay.
Many US politicians and members of the public remain concerned that military action could draw the nation into a prolonged war and spark broader hostilities in the region.
Support in Congress for a measure authorising attacks on Syria has remained relatively low, with more than 230 of the 433 members in the House of Representatives reportedly either opposed to or likely to oppose strikes as of Friday.
In addition, opinion polls suggest Americans remain wary of a strike against Syria, with only one in five believing that a failure to respond to chemical weapons attacks would embolden other governments, according to an Associated Press poll concluded on Monday.

AUD/USD continues post-election rally

Investing.com - The Australian dollar extended its post-election move higher against its U.S. counterpart during Tuesday’s Asian session.

In Asian trading Tuesday, AUD/USD rose 0.40% to 0.9266, the Aussie’s highest levels against the greenback since late July. The pair was likely to find support at 0.9038, the low of September 4 and resistance at 0.9345, the high of June 26.

The Aussie gained steam after the Citigroup Economic Surprise Index for China, which shows if the country’s data beat or missed expectations, touched a five-month high Monday, Bloomberg reported. Traders also embraced victory by conservative leader Tony Abbott in the race to become Australia’s next prime minister.

Data showed that job advertizements in Australia fell 2% in August, after a 1.10% decline the previous month.

A separate report showed that Australia's home loans rose 2.4% in July, beating expectations for a 2% increase, after a downwardly revised 2.6% rise the previous month.

Separately, improved trade data out of China over the weekend added to indications that the world’s second largest economy is recovering from a slowdown. Data on Sunday showed that Chinese exports were 7.2% higher year-over-year in August, up from 5.1% in July, and imports were up 7%.

Data on Monday showed that Chinese consumer price inflation was up 2.6% year-on-year in August, in line with expectations. China is Australia's biggest export partner.

Elsewhere, AUD/JPY climbed 0.44% to 92.30. Earlier Tuesday, BoJ said that Japan’s M2 money stock was unchanged last month at 3.7%. Analysts expected a modest increase to 3.8%.

In a separate report, METI said that Japan’s tertiary industry activity index fell to -0.4% in August from -0.5% in July. The July number was revised lower from -0.3%. Analysts had expected Japanese tertiary industry activity index to fall -0.4% last month.

AUD/NZD rose 0.07% to 1.1523.