Weekly Market Report – 15.10.2018
CurrenciesEUR/USD – has moved down to the support around the 1.095 level, which is close to the lows of just after the Brexit vote. All eyes will now be on ECB President Draghi to see what he says this afternoon with regard to the progress of the European economy and if they will change QE now, or will evaluate and decide in December.
USD/JPY – moved down towards the upwards trend line we can see on the 1 and 4 hour chart. We might see another attempt to conquer the 104 level, especially as the USD continues to strengthen and also the technical are turning around.
GBP/USD – the better than expected UK data was unable to lift the GBP a lot and when reports came out that Germany will prevent any Brexit talks besides the official ones, the GBP lost more steam, as this is seen as a tough German negotiation position.
USD/CAD – dropped sharply after the oil inventories showed a larger decline than expected and oil reached the highest level in well over a year, but also as the BOC didn’t change the interest rate and also she monetary policy report was a bit more positive, with the downside risk to inflation absent, although growth outlook was downgraded a bit. It reached the support around the 1.30 level, however we saw a large turnaround as oil declined a bit, but mainly because BOC Poloz said that the BOC actively discussed more stimulus measures, which weakened the CAD.
IndicesDAX 30 – is on the verge of breaking through the downwards trend line, but was not yet able to close convincingly above it, and a lot will depend on the ECB press conference this afternoon.
S&P 500 – continued to rise as the energy sector rose and also financials on the backdrop of the higher oil price and good earnings respectively.
CommoditiesGold – moved up after the reports from Germany that they will be taking a tough stance with regards to the Brexit. We came close to the resistance around the 1270 level, as we see the USD strengthening further.
Oil – moved up after the EIA inventories showed a draw of 5.2 million barrels, more than expected and also more than the API crude stock the previous evening. Again we saw a difference of around 2 million barrels, continuing the trend of a large difference between the API and EIA data. Oil moved over the resistance in the immediate aftermath, but was unable to close above this level. We see production finally increasing slightly and it will be interesting to see if this trend will continue and increase, with the rising number of active rigs over the last weeks and also the higher oil price.