News & Analysis

Equity Markets mixed – Tech rebounds – Europe starts April in the red; Gold pulls back; USD mixed – Lower to CAD jumps to the Yen.

Apr 4, 2018 | Daily Market Outlook

Upcoming high impact news:

▸ 11:30 AUD Retail Sales
▸ 18:30 GBP Construction PMI
▸ 22:15 USD ADP Non-Farm Employment Change
▸ 00:00 USD ISM Non-Manufacturing PMI
▸ 00:30 OIL Crude Oil Inventories

US markets – Stocks rebounded on Tuesday as the Tech sector recovered. Monday’s session fears easing as buyers returned at key levels on indices. Yesterday key lows where tested by sellers the picture wasn’t looking great. The Dow Jones added 389.17 pts. The S&P500 added 32.57 pts and the NASDAQ recovered 71.16 of Monday’s plunge. “So far, this is a reaction to an oversold condition,” said Bruce Bittles, chief investment strategist at Baird. “What we’re looking for now is an upside volume explosion” of nine stocks rising for every declining stock to confirm a new upward trend is starting out. “Unless we get that, all rallies are suspect.” This is a good comment, buyers still have a bit to do to prove they have the imbalance. Trade worries eased last night but are still a concern. The US30 held 23,580 after a pre-NY session test. We would like to see buyers hold that level to show buyer confidence in the short term.

European markets – Stocks started April in the red, the DAX fell by 94.28, the FTSE closed 26.15 lower and the CAC lost 15.18. A potential trade war and regulation for the technology sector weighed on buyer confidence last night. Sodexo dropped 4.5 percent. The firm saw its rating downgraded by several brokers after the company reported lower expectations for 2018. GKN also fell 3.6 percent after Melrose confirmed an $11 billion takeover of the British company. The GER30 is showing a double test from 11,950 this is an area we would like to see buyer hold. The UK100 is showing resistance from 7075.

Oil – Edged higher on Tuesday closing 50 cents higher. “There’s not really one catalyst for crude being up today,” said John Macaluso, an analyst at Tyche Capital Advisors. The gains were in part the result of a technical rebound from Monday’s losses, as well as a recovery in the equities market, Macaluso said. USOUSD daily is showing resistance from $63.70. The Current price action has broken its uptrend and could be consolidating that break if we see a counter rally develop. We would like to see bulls break that level to cancel this out.

Forex –A mixed night for the USD. The USDCAD had a strong fall losing 103 pips. The USDJPY rallied by 73 pips. The AUD and GBP traded higher to the USD but the EURUSD ended the session lower by 30 pips. The EUR was mainly weaker across the boards. Pairs made strong gains to the Japanese Yen, parring all to most of Monday’s loses. The AUDJPY added 77 pips to settle at new weekly highs. Traders should be a touch wary as GBP and EUR rallies to the Yen still remain choppy and could still be viewed as counter-rallies. Gold failed to hold above 1341, sellers took charge sending price $7.60 lower despite a mixed USD but mainly on trade fears taking a breather. Gold has set up a lower high and is now trading in a range. Traders keep an eye on this 50/50 we have now.

US30 – was saved by the bell, after a low test buyer’s returned just in time to re-hold Feb crash lows. A new higher low has formed but price remains under lower highs above. Bulls have their low test but now need to break out of the current congestion to start selling a possible turnaround. 

Good trading from Eightcap.

Sources; CNBC.  All times are AEST

* 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