US data continues to slow

25 August, 2017

US data continues to slow

US markets continue to be lacklustre at present, as US data continues to disappoint and the Trump effect has certainly started to wear off in the current market climate. This was further compounded today by US existing home sales m/m coming in weaker than expected at 5.44M (5.55M exp) which came as a surprise as the summer season is normally the peak for home sales in the US. This for me is also a sign that US consumers are not so confident to upgrade and change homes as well with all the uncertainty at present. The only positive data that was seen in the end was initial jobless claims which came in at 234K (238k exp), so a slight improvement but a jump over last week's figure of 232k. Regardless of the data and the current market fears I believe the market is getting semi excited over Jackson Hole which is due out shortly and this has led to buying of the USD, but how long can it last.

So with the market in a lurch and US data being lacklustre I still feel that hedging and safe haven currencies are likely to continue to play a large part. For me one of the key hedging instruments thus far has been gold. It has consistently risen over the past few months on the back of Trump and the US economy and is now approaching strong resistance at 1295. Each resulting daily candle has a higher low on the wick, and I believe that bullish moment could be very well building under gold's movements. Adding to this, is the 20 day moving average which has been acting as dynamic support and is quickly rising to the resistance region - this could in turn squeeze traders above 1295 all together. If we did see a solid rejection at 1295 and the 20 day moving average broken then all assumptions would be pushed aside and support at 1258 would quite rightly be the best possible target for gold bears taking a swipe.

Adding further to the headaches of the world economy is the pound and Brexit, which continues to lack direction at the best of times and taunts the European markets on a daily basis. While the UK economy saw GDP in line with expectations today it also saw that business investment y/y was flat at 0%. A tell tale sign of uncertainty and one that will have ripple effects across the UK economy!

GBPUSD traders have been looking for any signs to jump higher, but so far it has not come at all and the bears are making moves. After the fall through yesterday the market has jumped higher to test the waters and previous support at 1.2844 has now acted as resistance and stopped any bullish movement in its tracks. I am expecting the potential of further falls down to 1.2733 as the market continues to be bearish in the face of so much uncertainty. 


Source link  
Sterling steady ahead of UK inflation data

Having successfully moved into phase 2 of Brexit talks, the focus will shift back to economic data in the UK. Today’s November CPI will likely be a market...

Market waits on Bank of Canada

With a US tax bill and a Brexit currently flying around in the markets it's hard not to get lost on the bigger picture for other countries as well.

Investors rotate from Tech to Financials

U.S. stock indices ended mixed on Wednesday. While the Dow-Jones industrial average closed at a record high after U.S. GDP showed the...


Consumer confidence hits record high

Consumer confidence was the star of the show today as it came in with its strongest reading since 2000. The reading of 129.5 (124 exp), is one of...

SP500 lifts to record high on US housing

The US market continued to steal the spotlight today in Monday trading as it continued to look robust as usual. New home sales m/m came...

Equities slide ahead of a busy week

Despite a record high close on the S&P 500 last Friday, Asian equities edged lower, led by Korean markets. Chinese stocks continued to decline...


Yen bulls jump on weak FED inflation

FOMC meeting minutes are always greeted warmly by the markets, as a glimpse of the potential future direction of the FED going forward...

S&P 500 hits record high

The US equity markets jumped sharply today on the back of positive economic data as US home sales m/m came in strongly at 5.48M (5.40M exp)...

European currencies dip on German politics

The Euro had a pause for concern in the evening trading session as the coalition talks in Germany fell apart leading to a political crisis in Germany.

  


Share: