News & Analysis
U.S stocks jump – Dow Jones tears above 24K. GBPUSD rally continues above 1.3500; Gold further falls – tests 1270
Today’s high impact news:
▸ 20:30 GBP Manufacturing PMI
▸ 00:30 CAD Employment Change – GDP – Unemployment Rate
▸ 02:00 ISM Manufacturing PMI
U.S stocks jumped overnight, the Dow Jones added 331.67 points, and the US30 that tracks the Dow has increased by 695 points this week. Tax reform has driven these gains but regardless these are amazing figures to see in less than a week of trade. The Dow Jones closed above 24K for the first time. “This tax-reform bill is not just about,” potentially lowering taxes said JJ Kinahan, chief market strategist at TD Ameritrade. “It’s also a psychological factor that Congress can get something done. That would be positive.” Sen. John McCain said Thursday he would support the bill, making it more likely that the GOP-led Senate will pass its bill. The Senate is expected to vote later on Thursday. If the upper chamber’s bill passes, the House and Senate would have to work on a new bill they can send to President Donald Trump. In Europe, the DAX started stronger but gave up gains to finish 37.89 lower. The carnage on the FTSE continued as it closed lower by another 66.89 points. The GBP and Brexit uncertainty continue to hurt buyer confidence. The FTSE is trading at 9-week lows. The UK100 CFD has started to find support from 7301 level could we see a short-term technical rebound?
FX – the GBP continued to steal the show with further strong gains overnight to the USD and JPY. The GBPUSD closed above 1.3500. The USD traded mixed, higher to the AUD, JPY and CAD but weaker to the EUR and GBP. The USDCAD traded 33 pips higher to test 1.2916. The USDJPY added a further 60 pips and has tested its 112.70 high this morning. Gold continued lower to the USD last night losing $9.50. Gold has lost just under $20 since Tuesday. Sellers briefly took price below 1270. Oil continues to flatline as the market digests the OPEC meeting. The producers’ current deal, under which they are cutting supply by about 1.8 million barrels per day (bpd) in an effort to boost oil prices, expires in March. Some Analysts are predicting oil may return to $80 a barrel.
GBPUSD – put in another strong session overnight adding 113 pips to close above 1.3500. Buyers have hit resistance level 1.3548. Will we see a short-term pause?
GOLD – has returned to a potential support area. Price has broken its trendline so we need to give buyers time to build their case. 1265 seen as the next level lower if sellers continue to hold sway.
Good trading from Eightcap.
Sources; Reuters, CNBC
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