USD sen­si­tiv­ity ahead of re­tail sales

Financial Mirror (Cyprus) - - FRONT PAGE -

Weak­ness and un­ease con­tinue to linger through the fi­nan­cial mar­kets as most Asian eq­ui­ties have ven­tured back into red ter­ri­tory. The Shang­hai Com­pos­ite In­dex failed to ap­pre­ci­ate on Tues­day’s trad­ing ses­sions as the weak data from China pres­sured any solid move to the up­side. On the other hand, Euro­pean eq­ui­ties have had a pos­i­tive day with the FTSE100 bal­anc­ing around the 6083 mark. The pres­sures from the un­cer­tainty over when the US Fed­eral Re­serve will be­gin rais­ing in­ter­est rates have re­sulted in the Amer­i­can eq­ui­ties clos­ing neg­a­tively in Mon­day’s ses­sion. It is likely that the jit­tery at­ti­tude mar­ket par­tic­i­pants have in­her­ited from the un­cer­tainty over the Fed’s de­ci­sion may trans­late into fur­ther losses in the New York ses­sion.

Op­ti­mism still ex­ists within the Ger­man econ­omy, as the Ger­man ZEW Eco­nomic Sen­ti­ment which was re­leased in the Euro­pean ses­sion printed at 12.1. This was be­low the ex­pec­ta­tions of 18.3 and re­sulted in the EUR be­ing ex­posed to mi­nor weak­ness be­fore claw­ing back the losses against the USD. It is ap­par­ent that the USD is in a height­ened state of sen­si­tiv­ity due to the loom­ing FOMC state­ment this Thurs­day, a re­tail sales fig­ure this af­ter­noon above ex­pec­ta­tions may have an ac­cel­er­at­ing ef­fect and fur­ther in­spire bullish mo­men­tum on the USD.

In the com­modi­ties cur­rency di­vi­sion, the CAD has been of some in­ter­est as of late. Canada has en­tered a tech­ni­cal re­ces­sion and the de­cline of oil prices has pun­ished the Cana­dian econ­omy which has trans­lated to a weak CAD amongst its coun­ter­parts. With the pos­si­bil­ity of the Fed hik­ing in­ter­est rates be­fore the end of the year, there ex­ists a mon­e­tary pol­icy di­ver­gence be­tween the BoC and the Fed. This may in­spire fur­ther bullish mo­men­tum on the USDCAD which is al­ready tech­ni­cally bullish on the daily time­frame. Sup­port can be found at 1.3150 and re­sis­tance at 1.3350. A break­out above 1.3350 can be seen as a tech­ni­cal cat­a­lyst for the re­sump­tion of the move up.

The EURNZD is tech­ni­cally bullish on the daily time­frame. Prices are above the daily 20 SMA and the MACD trades to the up­side. A break­out above the 1.8000 re­sis­tance may open a path to the next rel­e­vant re­sis­tance at 1.8600. A move back be­low 1.7350 in­val­i­dates this bear­ish out­look.

The AUDNZD cur­rently trades within a wide range. Prices are above the daily 20 SMA and the MACD has crossed to the up­side. A break­out above the 1.1300 re­sis­tance may open a path to the next rel­e­vant re­sis­tance at 1.14300.

Gold re­mains bear­ish. The break­down of the

EURNZD:

AUDNZD:

GOLD:

light sup­port at 1110.0 may pro­vide a light re­sis­tance which should aid for a fur­ther de­cline back down to the next rel­e­vant sup­port at 1080.0. A move back above the 1125.50 in­val­i­dates this daily bear­ish out­look.

Mar­kets Re­port b

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