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Wall St takes a day off; Europe drops – DAX loses 66; USD flat in lighter trade – Majors finally make rallies to JPY; Oil makes it 4 in a row closing above $62.

Feb 19, 2018 | Market Updates

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Ôû©11:30 AUD Monetary Policy Meeting Minutes
Ôû©21:00 EUR German ZEW Economic Sentiment

US markets – where closed on Monday for Presidents Day. Oil – traded higher on Monday for the fourth straight day adding 78 cents. Lifted by a global equity market recovery and tensions in the Middle East, although concerns of rising U.S. production tempered gains. Israeli Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the Middle East, after border incidents in Syria brought the Middle East foes closer to direct confrontation. We see a short-term high at $62.25, and the next main resistance at $62.80 from the 4H chart.

European markets – closed lower on Monday in lighter trading, the DAX finished 66.36 lower. The FTSE lost 47.04 points and the CAC closed 25.40 points lower. Eurogroup backs Spanish Economy Minister Luis de Guindos to be the next ECB vice president. British households have become gloomier about their finances. IHS Markit’s household finance index hit a seven-month low, which also impacted views on the household goods sector. Deutsche Bank was the best performing banking stock, finishing the session up by over 2 percent after Bank of America Merrill Lynch raised its outlook on the stock and its target price.

Forex – the USD traded in a flat night, not surprising due to the US bank holiday. Small gains made to the CAD. Risk majors finishing slightly higher apart from the cable, it closed 15 pips lower. Risk pairs continue to show seller rejection at or below Friday’s lows. This can be viewed as bullish but due to Monday’s light trade, we’re looking for further confirmation. The AUDUSD and cable continue to form lower highs after trend breaks. Momentum continues to look soft for bulls from the daily chart, we’d like to see a statement made that buyer momentum is solid before thinking long. Majors finally made some gains to the Japanese Yen overnight. The AUD and EUR snapping 2-day losing streaks. The GBP snapped a 4-day losing streak closing 25pips higher. 148.85 continues to act as a support low. The EURJPY has found short-term support at 131.70.

GER30 – found resistance at 12,547 overnight. Are we seeing the start of a new test lower starting? A break of 12,350 could start to confirm a new bear raid.

Good trading from Eightcap.

Sources; CNBC. All times are AEDST

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