A1 Trading Company

February 26, 2024

How China Could Move Gold & Oil This Week

Frank Cabibi

News in the US takes a break this week, but key numbers come out in China that will help set the tone of where demand lies in the commodities market. We will have PMI news on Thursday so here are some setups to look for pre-data combined with EdgeFinder sentiment.

EdgeFinder Analysis

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.

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.

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.

Retail Spotlight

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.

Smart Money Spotlight

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.

Fundamental Spotlight

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.

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

Hotter CPI Shakes Markets

Yesterday's CPI numbers in the US caused considerable doubt in the expectations of a June rate cut. This morning's PPI came in lower than expected. But, it might not be enough to convince investors of a summer rate cut. EdgeFinder Analysis EURUSD is a -8 now on the EdgeFinder indicating dollar strength after the higher […]

Read More
Key Inflation Data Weighs on Investor Sentiment

Wednesday's inflation report in the US will be very pivotal in how USD-related assets will react for the next month. Higher CPI has investors worried of the Fed who still looks to cut rates at some point this year, but the inflationary trend could determine when these rate cuts come. EdgeFinder Analysis We have been […]

Read More
PMI Pushes Higher into Expansion

This morning's ISM Manufacturing PMI data came in higher than expected this month at 50.3. Here is what investors might be thinking in regards of the latest numbers, and why this could be bearish for the dollar. EdgeFinder Analysis USOil's score drops at the start of this month as the seasonality on the 10-year average […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram