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US stocks post recovery after test lower – Europe closes lower; Oil continues slide dropping below $60; JPY turbulence see’s GBPJPY trade in 382 pip range

Feb 12, 2018 | Daily Market Outlook

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▸20:30 GBP CPI

US markets – continued volatile trade on Friday, the Dow Jones traded in a 1000 point daily range to settle 330.44 points higher. The S&P500 closed 38.55 points higher and the NASDAQ closed 97.33 points higher. The Dow and the S&P 500 both ended the week 5.2 percent lower, their worst performance since January 2016. “What’s happened here is an understanding that inflation is returning and that the central bank quantitative easing that we’ve grown accustomed to is coming to an end,” said Jim Bianco, head of the Chicago-based advisory firm Bianco Research. “Since the financial crisis, this is the first 10 percent correction in stocks that has not been accompanied by a significant fall in rates.” Looking past the extreme volatility, the US30 chart has formed a higher low from the 4H chart, with further confirmation we may see continued buying.  4H HL Formation US30

Friday’s session on the Dow Jones intraday chart.

Oil – continued to slide on Friday, losing a further 155 cents to close below $60 for the first time since November 2017. Oil has lost 8.5% on the week. Oil prices fell for a sixth day on Friday, as record-high U.S. crude output added to concerns about a sharp rise in global supplies. OPEC member Iran also announced plans on Thursday to increase production within the next four years by at least 700,000 barrels a day, which Brennock said marked “a hat-trick of heartaches” for oil bulls.

European markets – failed to post recoveries as seen in the US market on Friday. The FTSE closed 78.26 points lower. The DAX lost 152.81 points and the CAC fell by 72.41 points. Earnings lifted single stocks but global sentiment ruled trader and investor confidence in Friday’s European session. L’Oreal closed higher after sales increased by 5.5%. UK Trinity Mirror closed 9.6% higher after announcing the acquisition of Northern & Shell’s publishing assets — with titles including OK!, Daily Star and Daily Express — for around £127 million.

Forex – a mixed session as the Japanese Yen continued to shake up session on the majors. The EURJPY and GBPJPY traded in wide daily ranges. The GBPJPY making a 382 pip range from low to high on Friday. The GBP closed lower to the USD and JPY, while the EUR and AUD made gains. The AUD being the stronger of the two for a change. The USDJPY followed suit on Friday trading in a choppy session after sellers threatened to break lower making a new weekly and yearly low at 108.04. The USDCAD finished 25 pips lower after racing higher to test 1.2687. Buyers failed to hold an 85 pip gain setting up a possible failed high from 1.2670.   Gold – traded a choppy $11 range on Friday, closing $1.80 lower. Sellers for a third time failed to close below $1311, setting a possibility of a short-term low.

GOLD – starting to set up signs of a short-term low from a demand area. We’d like to see 1310 hold during today’s session to show continued buyer support.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

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