News & Analysis

US stocks hit new records; USD lower; Gold Jumps – Oil Explodes back above $57

Nov 7, 2017 | Daily Market Outlook

Today’s high impact news:

14:30 AUD RBA Rate Statement – Cash Rate

20:00 EUR ECB President Draghi Speaks

A mega-deal on Wall St helped dive US stock indices to fresh record highs. The USD stumbled against a basket of currencies, with the GBP and AUD standing out with strong sessions. Oil has continued to drive higher breaking back above $57.

The NASDAQ composite, Dow Jones industrial average and S&P 500 all reached record highs as sentiment on Wall Street was lifted by news of corporate deal-making. Broadcom offered to buy fellow chip maker Qualcomm for $70 a share. If completed, the deal would be the biggest in the history of the tech sector. The Dow Jones +9.23, the S&P500 + 3.29 closing in on 2600 closing at 2591.13. The NASDAQ +22.00. The Dollar backed off overnight, leads were low with no key data. The USDJPY settled 31 pips lower after giving up a 70 pip lead. The AUDUSD held its support zone we discussed Saturday on Twitter to rally 40 pips. The GBPUSD was another stand out adding 105 pips helped by USD weakness. Gold jumped by $11 to close back above $1280. Oil the main event continuing on from Friday. The price surged again adding 129 cents to close above $57, going deeper into 2015 price levels.

In Europe markets where mixed, the FTSE closed higher adding 1.93 points the DAX closed 10.07 points lower. The EUR had a weaker night, losing ground to the AUD, NZD and JPY. Despite the USD weakness the EURUSD failed to capitalize closing slightly lower after a 35 pip drop that retested 1.1574 support. The EURUSD has set up a double bottom on the daily chart. Confirmation is still required.

Local shares have started Tuesday higher, the ASX200 is trading 38 points higher at 5992. The AUD is slightly lower to the USD and JPY. The focus will be shifting to today’s RBA rate decision at 14:30. The consensus sees a hold and based on current inflation we are looking for a hold as well.

Gold  – rallied $11 overnight reconfirming $1265.50 support. Yes, it was a solid showing from the bulls but we still see $1283 as a short-term resistance. This level was tested overnight but price closed below. We’d like to see this level beaten to show buyers have the imbalance.

Oil – continued its march overnight adding 129 cents to close above $57. The Saudi purge continues to be the key driver. Price is now getting close Januaries distribution area, will we see $60 a barrel this year? 

Good trading from Eightcap.

Sources Reuters, CNBC

* 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