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