News & Analysis

Stocks take a breather; JPY retreats; EUR jumps – EURUSD moves above 1.1835; Gold stalls at 1265.40

Dec 20, 2017 | Daily Market Outlook

Today’s high impact news:

▸ 00:15 GBP BOE Gov Carney Speaks
▸ 02:30 USD Crude Oil Inventories
▸ 08:45 NZD GDP q/q

U.S indices took a breather on Tuesday after two sessions of strong gains. The Dow Jones finished 37.45 lower the S&P500 8.69 points lower and the NASDAQ closed 30.91 points lower. Apple fell 1.1 percent after Nomura Instinet downgraded the tech giant’s stock. Apple dragged the tech index lower. House members voted to pass the tax bill on Tuesday. The Senate is also expected to pass the measure. The bill would cut the federal corporate tax rate to 21 percent from 35 percent. “The slashing of the corporate tax rate will bump up the bottom line for most of the members of the S&P 500 whose constituents pay on average 27.4% of their income to the government,” said Jeremy Klein, chief market strategist at FBN Securities, in a note. He also said that the “The certainty of this event will keep volatility muted which precludes share prices from taking a meaningful tumble in the short term.” Republican Sens. Mike Lee and Susan Collins — two of the last GOP holdouts on the tax bill — said Monday they would support the measure, increasing the likelihood of it passing the Senate.

European stocks finished mixed on Tuesday, the FTSE closed slightly higher by 7.08 points. The DAX lost 96.51 points and the CAC closed 37.67 points lower. The GER30 CFD index started softer and never really looked like getting going. Once German Ifo business morale showed an unexpected fall in December sellers locked in. U.S tax reform hope failed to reverse sellers. The move lower on the DAX was a little more overdone than the in the U.S but we did see a 300 point rally in the previous two sessions.

The USD traded flat to lower most of Tuesday, buyers arrived into the NY session as Building permit data came in above expectations showing an increase to 1.30 Million. The USD jumped to the CAD testing 1.2910 resistance but buyer strength was short lived as price retraced back into its range. The GBPUSD and AUDUSD both traded in choppy sessions, the cable fell by 47 pips at one point, traders should keep an eye on 1.3402 level on the daily chart. It looks to be forming resistance. The JPY lost ground overnight to the majors, the EUR AUD and USD made strong gains. The EURJPY tested 30 November closing high. Continuing with the EUR we saw strong gains across the board, the EURUSD added 58 pips to close above 1.1835. Gold tested and failed at 1265.41, this level is the October 27th previous low.

This morning the AUS200 started higher but sellers have appeared from 6070. This 1H level looks to be the current intraday resistance point for buyers.

GOLD – buyers look to be slowing down, 1265.41 is starting to develop as resistance. Will we see a correction form from this point? 

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

 

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