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Facebook drags tech, NASDAQ 1.8% lower – Micro Focus 46% tank drags Europe lower; Brexit talk drives GBP higher – ECB boosts EUR – Majors fight back to JPY

Mar 19, 2018 | Daily Market Outlook

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US markets – traded in the red last night as Facebook lost 6.8%. Sellers took hold once after reports said political analytics firm Cambridge Analytica was able to collect data on 50 million people’s profiles without their consent. Cambridge Analytica worked on Facebook ads with President Donald Trump’s campaign in 2016. “We think this episode is another indication of systemic problems at Facebook … We see enhanced risks for the company, but no near-term tangible impact on its business,” Brian Wieser, an analyst at Pivotal Research. The NASDAQ fell by 174.74. The S&P500 lost 39.09 and the Dow Jones lost 335.60 points.

President Trump’s tweets also worried investor sentiment, On Sunday morning, Trump accused special counsel Robert Mueller of hiring “hardened Democrats” to probe alleged ties between his 2016 presidential campaign and Russia. The president also dismissed the idea of former Deputy FBI Director Andrew McCabe – who was fired on Friday just two days before his retirement – having incriminating documents on him. Shortly after his firing, several media reports suggested McCabe kept a file of notes on his discussions with Trump, similar to documents former FBI Director James Comey is said to have taken. Selling started early with futures showing triple digit loses. We reported in our CFD report that traders should be watching resistance at 25,000 this level held nicely and markets moved lower.

Oil – traded sharply lower in last night’s session but sellers were not able to hold gains. Buyers reversed paring 80 cents of loses after price tested 61.38 to the downside. Price settled slightly in the red at $62.23. Crude markets are still warry due to US production buyers have been supported on the short-term by tensions between Saudi Arabian and Iran, Falling Venezuelan output is also seen as a risk to supply. US production, “At the current oil price level, drilling activity and thus output in the U.S. is likely to increase further,” analysts at Commerzbank said in a note. Soaring U.S. output, as well as rising production in Canada and Brazil, is undermining efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to curb supplies and bolster prices. USOUSD continues to hold its breakout with support low seen at 61.35 but buyers still have the 62.43 resistance level to beat.

European markets – ended sharply in the red last night. The FTSE lost 1.7% -121.21 pts lower as Shares of Micro Focus ended trade 46 percent lower. The British tech firm said its CEO had quit amid ongoing problems with its recent purchase of Hewlett Packard Enterprise assets. The DAX closed 176.52 pts lower and the CAC closed 59.91 pts lower. Brexit weighed in again last night the U.K. will remain within the European Union until the end of 2020, but with restricted powers.

Forex – had a big night, Brexit sent the GBP surging, the GBPUSD added 90 pips and tested 1.4090. The GBPJPY added 120 pips but currently sits below 148.80 resistance. The EUR jumped after a report showed shifting rate hike discussion. The EURUSD jumped closing 55 pips higher and the EURJPY closed 80 pips higher. Signs there this could be the start of a leg up. But if cold water is thrown onto this development this could turn into a flash in the pan. Traders would be looking for further buyer commitment to show bullish momentum. The majors closed higher to the JPY as it took a break from its charge. Several majors are showing bottoming patterns but buyers should be waiting for further confirmation. The USDCAD closed 10 pips lower as the USD fell away to the majors. Price made a failed high above 1.3094. Gold snapped back after breaking lower in yesterday’s Asian session. After losing $5, buyers closed $3.70 higher, price making a failed low reconfirming the 1308 area low.

EURJPY daily, technically there’s a bit happening. Price has formed a higher low from a support area. Price has broken its downtrend line. Last night’s candle is an outside bullish bar with a false breakout. With a break of 130.90 -140.00 we could see a new rally develop.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

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