Market showed signs of strength

24 September, 2018


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


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.


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


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 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.

Wall St. bullishness returns20 Nov, 2019  

Chile's $300bn a year economy that has been running at a rate above 3% YoY is now expected to shrink as early as this quarter due to widespread...

Continued China Weakness13 Nov, 2019  

China reported new bank loans dropped to the lowest level in two years as manufacturers held back due to trade uncertainties and signs of weak demand...

Trade progress expectations fuel market strength6 Nov, 2019  

US major indices close at record-breaking highs on reports of progress in talks with China and increasing confidence in economic growth...

Markets in Details: 23 September 201923 Sep, 2019  

The market sentiment is taking a hit on Monday after U.S. President Trump called China a threat to the world and dismissed the possibility...

Markets in Details: 18 September 201918 Sep, 2019  

Oil prices dropped after an update by the Saudi government that normal crude production levels could be regained within two or three weeks...

Markets in Details: 02 September 20192 Sep, 2019  

The amount of worry concerning global economic growth appears to be increasing at the start of the week. The drop in China's PMI on...

Markets in Details: 22 August 201922 Aug, 2019  

Recession fears are creeping back in on Thursday. After a mixed session for major equity indices in Asia and Europe, U.S. markets opened...

Markets in Details: 21 August 201921 Aug, 2019  

Strong earnings reports from retailers like Lowe’s and Target are pushing markets higher in the U.S., reversing the 170-plus point loss on Tuesday...

Markets in Details: 20 August 201920 Aug, 2019  

Investor sentiment reversed after a number of negative headlines hit the wires on Tuesday. U.S. Secretary of State Mike Pompeo said...