News & Analysis
U.S Indices fall –S&P500 first 3-day loss since AUG, USD fights back – Gold touches 8-week lows.
Today’s high impact news:
▸ 00:15 USD ADP Non-Farm Employment Change
▸ 02:00 CAD BOC Rate Statement
▸ 02:00 CAD Overnight Rate
▸ 02:30 OIL US Crude Inventories
Equity markets traded lower on Tuesday, the USD continued its recovery knocking gold to 8-weeks lows. The AUD, EUR and GBP trimmed gains and made loses to the greenback.
Tuesday saw weaker finish for U.S shares. The S&P500 posted it’s first 3-day loss since AUG closing 9.87 points lower. The Dow Jones lost 109.41 and the NASDAQ failed to hold gains closing 13.15 points lower. Investors also looked ahead to a potential government shutdown. If Congress fails to craft a deal on government spending by the end of the week, the federal government could close until a deal is struck. European stocks spent another day in the red, Brexit continues to be the main factor. US weakness another factor for late in the session. The FTSE closed 11.47 points lower the DAX finished 10.01 points lower. The topic of Brexit will continue to shake up sentiment. In the latest talks between the U.K. and the European Union, both sides failed to agree upon the terms for the U.K. leaving the political-economic bloc on Monday.
Last night’s surprise was the USD as is it bucked weaker stocks to close higher driven by newly passed tax reform hope. The USD cut the AUD down as it fell from weekly highs to close 13 pips higher. Brexit continues to dominate the GBP as it made new falls overnight. The GBPJPY has started the month 131 pips lower after briefly touching new 2017 highs. The EUR traded lower to the USD and JPY last night. The EURUSD broke its med-term uptrend, traders will be watching 1.1815 support on the daily chart. This level has held for buyers since the 23rd of November. Sellers are testing this level this morning. Gold touched 8-week low’s overnight as the USD pushed buyers out of the market. $1260.60 next key support level for buyers, price looks locked into a downtrend now, buyers have their work cut out.
Australian GDP data came in worse than expected this morning at 0.6% lower than the last 0.8% data. The AUD lost ground after a brief spike, currently trading 30pips lower.
EURUSD – Sellers forced a break of the med-term uptrend last night. Sellers still have 1.1815 support to beat. This is an important level for us, a break could set up a deeper correction.
GOLD – made fresh weekly low’s overnight. Sellers took price down to 1260.60 and 8-week low. This level has stood since AUG a break here setups up a larger overall downtrend continuation. The ball remains in the USD court.
Good trading from Eightcap.
Sources; Reuters, CNBC
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