Weekly Market Report – 15.10.2018
CurrenciesEUR/USD – is trading below the 1.12 level again, after the ISM data out of the US was pretty strong. European data was also strong, but the focus is move on the USD at the moment, especially with the NFP coming up tomorrow. Technically we can see that there is a downwards trend line on the 4 hour chart.
USD/JPY – since September 27th we have moved up for already 8 consecutive days, totaling over 350 pips. That’s a profit of $35 for the smallest position size which required only $2.50 in margin, meaning that the profit in just over a week would have been no less than 140%. Not bad for a week of trading! We are nearing the level at which we were trading before the BOJ and FED decision on the interest rate. If we are able to move above that level, the next resistance is pretty close and is just below the 105 level.
GBP/USD – the better than expected PMI data out of the UK was unable to really move the GBP up, even though we closed the day slightly higher. This was more due to some possible bargain hunting, as also the US data was strong and the USD strengthened across the board. Today we are back in more familiar territory and moving down to test the lows of yesterday and possibly breaking below the 1.27 level again. Today is a light day on the calendar, but tomorrow is quite busy with obviously the NFP but also enough UK data to cause some volatility.
IndicesDollar Index – continued moving higher, also bolstered by the strong ISM data yesterday out of the US, which strengthened the USD. As always, the NFP of tomorrow will be the most watched data and the deciding factor whether we will continue to see a further strengthening of the USD or a (sharp?) correction. The odds for a November rate hike are slowly increasing, and will jump more if the NFP will be strong.
S&P 500 – moved up, also due to apparent better economic conditions in the US, as well as the energy sector supported the index. With the renewed expectations for a rate hike in the near future, we can expect some pressure, especially since we are getting closer to the resistance around the 2167 level.
CommoditiesGold – tried to move up during the day, but was stopped by the resistance around the 1276 level. Today we are continuing to move down as the USD remains strong. The next support level can be found around the 1240 level only, so if there is no sudden turnaround, there is enough space to move further down.
Oil – moved further up and nearly reached the 50 level, but fell short of reaching this. The inventories showed another reduction, although much less than the API data, a difference of nearly 4 million barrels. Even though, this wasn’t enough to make oil drop, especially since also the production dropped slightly and gasoline inventories also dropped more than expected.