Market showed signs of strength

24 September, 2018

News

The U.S. labour market showed signs of strength as the unemployment claims data exceeded expectations, dropping to a 49-year low, and the Philly Fed Index showing a rebound in America’s manufacturing sector. However, home sales did not increase as much as expected as house prices were lifted by a limited supply of properties for sale.

In a latest move relating to the trade dispute with the U.S., Bloomberg reports China is planning to cut import taxes from its non-U.S. trading partners as early as October.

The OECD reduced its global economic growth for 2018 to 3.7 percent, stating it has seen trade decelerate for several months and that Europe will see softer foreign demand. A flash estimate found Euro zone consumer confidence fell more than anticipated in September.

Brexit is looking at a no-deal scenario again. The EU’s head of European Council said the UK’s plan “will not work”, Germany’s Angela Merkel noted “substantial work” remains, and French President Macron said the current plan is not acceptable.  A no-deal Brexit would most likely materialise, EU leaders believe, if the UK does not change its position on trade and the Irish border by November.

The focus of attention

The Euro zone and the U.S. are slated to release their September PMI reports at 08:00 GMT and 13:45 GMT, respectively.

The weekly number of oil rigs in the U.S. is scheduled for release at 17:00 GMT.


Expected events

  • 08:00 GMT Euro zone Manufacturing PMI data expected.
  • 12:30 GMT Canada releases its inflation data for August and Retail Sales for July.
  • 13:45 GMT The U.S. releases its Manufacturing PMI data.
  • 17:00 GMT Latest rig count from the U.S. Baker Hughes Oil Rig Count data.

Technical Analysis

EUR USD

The EUR USD cleared the 1.172 resistance easily yesterday and could continue to test the next resistance level at 1.178 with RSI nearing 70. Friday’s trading will show whether it can consolidate at current levels to push higher or fallback to rely on the nearest support 1.153.

GBP USD

Having cleared the resistance at 1.3205, the Cable looks a little over-extended with RSI of 70, a level not seen since April. Therefore, a short-term pullback or consolidation can be expected on Friday. The asset would be looking to set a base to push past resistance at 1.328.

EUR AUD

EUR AUD is trying to overcome a double top pattern. The asset needs to of course grind past the next resistance at 1.622.

AUD USD

After finding support at 0.708, the Aussie is bullishly advancing towards the 0.7379 resistance level. With RSI of near 60, it has some room to do so between Friday and next week.

USD JPY

USD JPY is in a bullish-mode setting higher highs and higher lows. It is some ways away from the 113.139 resistance and the short-term pattern shows consolidation is in order for the uptrend to continue.


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