News & Analysis
Dow new records – tech sector falls; GBP trims gains – Brexit stall; USD lower – JPY fights back.
Today’s high impact news:
▸ 20:30 GBP Services PMI
▸ 00:30 CAD Trade Balance
▸ 02:00 USD ISM Non-Manufacturing PMI
Monday was a mixed night for stocks as the Dow Jones added 58.46 to close at a new record 24,290.05. Tech sector fell dragging the S&P500 and NASDAQ lower. The NASDAQ lost 72.22 while the S&P500 retreated by 2.78 points. The DOW was led higher by Walt Disney and Boeing. The Dow also hit an intraday record and rose more than 300 points at its session high. The S&P 500 closed 0.1 percent lower at 2,639.44, as information technology fell nearly 2 percent. The index had gained 0.87 percent at its session high, marking the first time since Feb. 10, 2016, the S&P 500 gave up such a gain. The NASDAQ composite lagged, sliding 1.1 percent to 6,775.37 as Facebook, Alphabet and Netflix all finished lower. The Fed is expected to raise rates next week, with three further increases in 2018.
Markets in Europe finished higher on Monday as U.S tax reform drove buyers. The FTSE added 38.48 and the DAX closed back above 13,000 adding 197.06 points. The construction and material sector led the gains, up nearly 1.6 percent, followed by the autos and chemicals sectors. Europe’s auto stocks, which have a large exposure to the U.S., rose 1.56 percent. UK manufacturing PMI came out overnight beating expectations to 53.01. Brexit continues with May holding off on a deal, infuriating the Irish. We’re seeing two key support points on the UK100 and GER30 cfds.
UK100 daily support level 7301 – GER30 daily support level 12,846 to 13,000 on the 4H chart.
Currency markets were mixed last night, the EUR traded choppy with falls and recoveries. The EURUSD started LON lower only to recover. The USD traded mixed, finished lower to the CAD and JPY. The JPY had a decent night making gains to the majors. The GBP was the night’s key mover. Into the LON session buyers came back in droves, the GBP rallied strongly adding 100 plus pips to the USD, JPY and CHF. Gains were trimmed into NY session as a rumored Brexit deal failed to happen. The USCAD returned to its support level, we’re looking for buyer’s next response now price has hit 1.2665. Gold traded mostly flat, sellers at one point ran price down to 1271.01, buyers returned taking price back above 1274, which looks to set up as a short-term low.
Australian data released today, current account came in worse than expected at -9.1B. Retail sales beat expectations coming in at .5% healthy increase on the previous figure of 0.1% The RBA meets at 14:30 today the consensus is they will leave rates on hold at 1.50%
GBPJPY – Buyers spent most of the session in control, with JPY strength and GBP cooling off sellers took control reversing a 137 pip gain. While 152.40 resistance continues to hold the market looks to have a bearish bias. Sellers still have 151.39 to beat.
US30 – New records reached again overnight, sellers did emerge late to close lower with a failed high. If today’s candle fails we could see sellers try a test lower.
Good trading from Eightcap.
Sources; Reuters, CNBC
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