Global growth concerns revived as Asian markets tumbled. Oil price volatility continues to sway market sentiment, with yesterday’s downward price action prompting the sell-off in Asian equity markets. The Shanghai Composite hit 14-month lows, dropping 6.5% while the Nikkei and Hang Seng both down around 2.4%. Despite Asia Equity performance, European markets quickly reversed with the DAX and FTSE posting gains of 0.89% and 0.59% respectively. Sentiment picked up further during the US session, with the DJIA and S&P 500 gaining 1.8% and 1.4% off the back of US consumer confidence data pushing to a three month high. Results in line with other indicators suggest volatility and negative market sentiment have not affected household sentiment.
Oil remains one of the key drivers of financial market sentiment, clawing back yesterday’s losses to sit around the $30.50/bbl mark. This small rebound could be attributed to rising hopes of cooperation between OPEC and non-OPEC producers. The Organization of the Petroleum Exporting Countries is making renewed calls for rival producers to cut supply alongside its members. Russia, seen as key to any deal, has so far refused to cooperate. At this time we’d like to once again stress the correlation between USDCAD and WTI oil which have almost moved in tandem with one another. Fundamental oil factors have remained largely unchanged over the last week. Some analysts are pointing to technical trading factors to explain the short-lived price rallies.
Quote of the day: Experienced traders control risk, inexperienced traders chase gains. Alan Farley
Currency Updates:
EUR/USD Intraday: the downside prevails
Pivot: 1.0875
Our preference: short positions below 1.0875 with targets @ 1.0805 & 1.0785 in extension.
Alternative scenario: above 1.0875 look for further upside with 1.0895 & 1.092 as targets.
Comment: the RSI lacks upward momentum.
Supports and resistances:
1.092 ***
1.0895 **
1.0875 ***
1.0849 Last
1.0805 ***
1.0785 ***
1.077 **
USD/JPY Intraday: the upside prevails.
Pivot: 117.5
Our preference: long positions above 117.5 with targets @ 118.85 & 119.2 in extension.
Alternative scenario: below 117.5 look for further downside with 117.05 & 116.45 as targets.
Comment: the RSI is well directed.
Supports and resistances:
119.7 ***
119.2 ***
118.85 ***
118.473 Last
117.5 ***
117.05 **
116.45 ***
GBP/USD Intraday: the upside prevails
Pivot: 1.4265
Our preference: long positions above 1.4265 with targets @ 1.4395 & 1.4425 in extension.
Alternative scenario: below 1.4265 look for further downside with 1.4175 & 1.4125 as targets.
Comment: the RSI is well directed.
Supports and resistances:
1.4475 ***
1.4425 **
1.4395 ***
1.436 Last
1.4265 ***
1.4175 ***
1.4125 ***
AUD/USD Intraday: the upside prevails
Pivot: 0.6965
Our preference: long positions above 0.6965 with targets @ 0.7025 & 0.7045 in extension.
Alternative scenario: below 0.6965 look for further downside with 0.6915 & 0.688 as targets.
Comment: the RSI is well directed.
Supports and resistances:
0.7075 ***
0.7045 ***
0.7025 ***
0.7014 Last
0.6965 ***
0.6915 ***
0.688 ***
S&P 500 (CME) (H5) Intraday: the downside prevails.
Pivot: 2054
Our preference: Short positions below 2054 with targets @ 2036 & 2027 in extension.
Alternative scenario: Above 2054 look for further upside with 2065 & 2082 as targets.
Comment: As long as 2054 is resistance, look for choppy price action with a bearish bias.
Supports and resistances:
2082 ***
2065 *
2054 ***
2044 Last
2036 ***
2027 **
2020 **
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