News & Analysis

Equity Markets –Europe ends in the end; AUDUSD above .7950; USDJPY 3-month lows; Gold stalled after 1344 test

Jan 16, 2018 | Daily Market Outlook

Today’s high impact news:

▸20:30 GBP CPI
▸04:00 CHF SNB Chairman Jordan Speaks

U.S markets – observed Martin Luther King Day on Monday. Oil continued higher overnight adding 32 cents. Price broke last Thursdays $64.53 high. This morning buyers have opened higher at $64.68, sellers in control with small loses. Oil markets have been well supported by production cuts led by OPEC and Russia which are aimed at propping up crude prices. European markets – traded lower on Monday, the FTSE lost 9.50 points, the DAX lost 44.52 points and the CAC closed 7.37 points lower. Trade was lighter due to the U.S markets closing for Martin Luther King Day. U.K. construction firm Carillion had entered into liquidation. The company’s shares were suspended from trading, but its rivals rose on the news, with Serco up over 7 percent and Interserve rising 2 percent. Finnish miner Metso dropped to the bottom of the European benchmark, tumbling 9.84 percent after the firm reported lower-than-expected sales and profits. Over the weekend, news emerged that BNP Paribas was making plans to benefit from the U.K.’s decision to leave the European Union. The French bank has prepared plans to attract mid-sized British companies, the Financial Times reported.

Forex – The dollar languished at three-year lows against a basket of currencies on Monday, while the euro stood tall on investors’ hopes that European Central Bank policymakers could be poised to further trim their monetary stimulus. Bank of Japan Governor Haruhiko Kuroda reiterated the central bank’s resolve to maintain its massive stimulus program until 2 percent inflation is achieved stability, he also said the country’s economy was expected to continue moderately expanding. Core consumer prices are rising around 1 percent, Kuroda said in a speech to BOJ regional branch managers. This was a slight change from his previous speech to branch managers when he said core consumer prices were around zero. The EUR, GBP and AUD continued their drive to the USD. The AUDUSD added a further 60 pips yesterday. The USDJPY lost 55 pips dropping to 110.30 on it low, 15th September levels. Once the USDCAD broke 1.2432 things looked ominous, sellers tested 1.2400 low area when buyers returned trimming 25 pips in loses. We’re watching this low as it’s the 2nd time it’s rejected, sellers. Gold trimmed gains after hitting 1344.63. Price closed $4.20 higher but traders should watch today’s action. We were looking at 1350 as a possible high, from 1345 to 1350 there are supply points. With signs, the USD might be overdone on the short-term we could see a pullback in Gold and other XXX/USD pairs.

Gold – failed to hold highs last night, 1350-1345 has the potential to become a supply area and possibly force a short-term retracement.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.

In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.

Follow Us