Markets throw caution to the wind

9 December, 2016

Markets have thrown caution to the wind when it comes to movements as of late as once again US equities set the scene with another stellar rise, though not as big as yesterdays. The main catalyst for this move was the US unemployment claims figures which showed a drop on the previous weeks result to 258K (257K exp). While still slightly above the expected figure it shows that the labour market is still very much alive and kicking in the lead up to Trumps swearing as president and that the market is certainly poised to grow if the infrastructure projects that many expect do in fact go ahead. On top of this financials have also been stronger, as many expect Trumps government to likely cut back on financial regulation in areas to help free up capital for further uses. The long term effects of this will be hard to measure but markets are expecting big things.

The S&P 500 had its maiden touch today as it clipped 2250 before retreating as some traders looked to unwind their positions in the market. I had mentioned yesterday that this would be the psychological barrier that traders would look to play off, the question is now where to from here. I would expect to see the S&P to rally higher, but with 2250 now acting as a strong level of support expect to see some ranging unless we get further Trump news, or an update from the FED. Any further falls are likely to touch on support at 2211 and also the 20 day moving average, which has so far been acting as dynamic support for any rises in the market.

For the Aussie dollar it has been another day of pain as it continues to struggle in the market, and is starting to look like it's consolidating against the USD rather than trending. It was not helped at all today by the recent Australian Trade Balance data coming in at-1.54B (-0.71B exp). This is a reflection of the strong Australian dollar when it comes to commodities which have been feeding the trade balance data for some time. The long term effects of the commodity prices being slightly depressed and not rebounding is likely to be felt on the markets as traders look to punish the AUD. Certainly for the Reserve Bank of Australia this will not be appealing and they may look to cut further in the future, but for now it's likely a wait and see game.

For the AUDUSD resistance at 0.7490 has so far held its grounds, and for the most part I expect and anticipate that we could see further falls on the charts given the strong USD, and the poor economic data we continue to see out of Australia. What will be key is the short term bullish trend line on the daily chart, when this breaks it will give the bears clear control and markets are looking ready to pounce on the opportunity. Looking for a strong level of support it can be found easily at 0.7326 and is likely to hold up against a first attempt to break through.

Source link  
iPhone sales indicate economic growth?

The recovery in U.S. stocks from October's slump evaporated on Monday with the Dow Jones Industrial Average falling more than 600 points, while the Nasdaq...

Saudi comments at OPEC support Oil price

The initial headlines coming out of the OPEC meeting in Abu Dhabi that Saudi Arabia has committed itself to lower production output should be enough...

Risk assets boosted by divided Congress

Asian stocks followed Wall Street higher after U.S. mid-term elections produced a divided Congress on Wednesday. All major U.S. indices climbed more than...

Rand rallies on risk appetite

Financial markets are continuing their forward drive on the realization that investors were rightly positioned for the outcome of the mid-term elections in the United States.

Dollar looks sensitive before elections

The market positioning at time of writing further suggests that investors remain hesitant to take on risk just hours before the mid-term elections in the United...

Conflicting trade signals set the tone

The early part of trading for the week has already showed how sensitive emerging markets can react to newsflow around potential trade developments...

Stocks back in the red

President Trump's tweet on Thursday that he had a long and very good conversation with President Jinping of China didn't serve the markets for long...

October: A month to forget!

Global equity markets ended a scary October on a slightly brighter note following a rebound on Wall Street during the final two trading days of the month...

Stock markets going nuts

Wall Street experienced one of its wildest trading sessions on Monday. What seemed to be buying the dips, turned into selling the rallies. The session...

In the past 24 hours Bitcoin has lost -0.53% and reached $5548.64263044. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -1.1164% and is now at $1.13. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -17.28% and is now at $175.073110899. Have the most popular cryptocurrencies compared online 24/7.

Top Brokers offering Forex Market Analysis

Forex Currencies Forecasts

Top 10 Forex Brokers 2018

# Broker Review
6FIBO GroupFIBO Group83%