News & Analysis

Global stocks mixed in thin trade – FTSE hits record high; AUDUSD hits OCT levels; Gold continues run; Oil takes a breather

Dec 28, 2017 | Daily Market Outlook

Today’s high impact news:

▸00:30 USD Unemployment Claims

U.S markets – moved higher on Wednesday in very thin trade. Gains were small with the Dow Jones adding 28.09, The S&P500 adding 2.12 and the NASDAQ closing 3.09 points higher.  Gains in real estate and utilities offset declines in energy and telecommunications stocks. Trading volume was on pace for the second-lowest of the year, with only Black Friday’s half-day of trading posting lower volume. Stocks historically tend to post a “Santa Claus” rally in the last week of December through the first two trading days of January. However, the Dow is the only major U.S. stock index on pace for slight weekly gains, which would be its sixth straight week. If the S&P 500 is able to finish the week higher, the index would close out the year with six straight weeks of higher trade for the first time the since in 1971. European markets – resumed trading on Wednesday with light trade. The FTSE closed 28.02 points higher making a new record during the session. The DAX edged slightly lower closing losing 2.77 points. The FTSE stole the show last night as buyers took price up to 7,632.71 hitting a new record high. 7538 level was a range high on the UK100 CFD chart. Buyers smashed that level and price looks to have made a breakout. We would like to see that level become support to confirm buyer strength.

Forex – USD continued its slide on Wednesday hitting a three week low, the EUR, GBP and AUD all continued to move higher. The JPY also weakened losing ground to the majors. The JPY was the weakest of the majors as the USD closed 12 pips higher. Commodities rally supports the Canadian and Australian dollar. Copper hit a high of $3.302 a pound on the New York Mercantile Exchange, its highest since Feb. 2014. This and a weaker USD drove the AUDUSD 40 pips higher returning to October 17 levels. This morning the Aussie has added another 10 pips to be trading at .7777, not far off .78 cents. Only four weeks ago the AUDUSD looked cooked as it sat at .7504. Gold continued higher last night driven by a weak USD, buyers added $4 to hit 1287. 1293 -1296 could present a potential supply zone, traders should keep an eye on these levels if they’re reached. Oil pulled back by 19 cents after it’s rally. The pullback is an inside bar and could be a pause before buyers take another shot at new highs.

AUDUSD – made strong gains supported by a weaker USD and commodity prices yesterday.  We see potential resistance at .7800.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST


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