Mar­kets, GBP and Gold ex­posed to fur­ther pres­sures

Financial Mirror (Cyprus) - - FRONT PAGE -

Anx­i­ety con­tin­ues to rip­ple through the fi­nan­cial mar­kets as global de­vel­op­ments con­cern­ing the lack of clar­ity on the tim­ing of a US in­ter­est rate hike, anx­i­eties over China en­ter­ing a deep eco­nomic down­turn, emerg­ing mar­ket weak­ness and con­tin­ual growth con­cerns in Europe, Ja­pan and Asia are all weigh­ing on global sen­ti­ment.

A risk-off trad­ing en­vi­ron­ment which has been the prod­uct of mar­ket in­sta­bil­ity con­tin­ues to pun­ish the value of Ster­ling which could still be ex­posed to fur­ther pres­sures against its trad­ing part­ners. There has also been neg­a­tive PMI data from the UK this month, and these fac­tors are push­ing back UK in­ter­est rate ex­pec­ta­tions with this also con­tribut­ing to GBP pres­sure. The GBPUSD has traded to four and a half month lows and re­mains tech­ni­cally bear­ish. With prices cur­rently re­sid­ing be­low the daily 200 and 20 daily SMA, a breach be­low the 1.5150 sup­port may open a path to the next rel­e­vant sup­port at 1.5000.

In the com­mod­ity di­vi­sion, Gold has ex­pe­ri­enced a sharp change of di­rec­tion and fallen to the down­side as a re­sult of pos­i­tive com­ments from Fed mem­bers that US in­ter­est rates can still be raised in 2015. The pre­cious me­tal which hit a one-month high last week, has given back those gains and more with prices trad­ing around the 1124.0 level. With mar­ket in­sta­bil­ity and in­vestor anx­i­ety cre­at­ing er­ratic moves within Gold, more di­rec­tion for the me­tal may be pro­vided once mar­ket par­tic­i­pants di­gest the key data re­leases re­gard­ing the de­vel­op­ments in Asia, Europe and the Amer­ica.

Some sta­bil­ity can be seen within WTI with sup­port at $44.00 hold­ing since the start of Septem­ber. A re­cent drop in US oil in­ven­to­ries inspired some bullish mo­men­tum on the bench­mark crude, but prices have still de­clined to the grav­i­ta­tional $44.00 area. The next ma­jor cat­a­lyst which may pro­mote a fur­ther de­cline in WTI might be soft eco­nomic data from China sig­nal­ing a de­cline in de­mand. Tech­ni­cally, WTI re­mains bear­ish with the next rel­e­vant sup­port based at $42.00.

Eq­ui­ties as a whole have taken a hit as a re­sult of the weak­ened global sen­ti­ment. In Europe, the FTSE100 has re­ally caught my at­ten­tion. Min­ing stocks have plum­meted fol­low­ing another weak PMI from China last week, which has re­sulted in the FTSE100 en­coun­ter­ing an ag­gres­sive sell-off. Prices have breached the psy­cho­log­i­cal 6000 sup­port with this in­dex re­main­ing tech­ni­cally bear­ish. Any ad­di­tional pres­sures re­ceived from weak China data this week or even selling in the com­mod­ity mar­kets as a whole

GBPJPY:

may re­sult in a fur­ther de­cline to the next rel­e­vant sup­port at 5850 on the FTSE100.

EURJPY:

The EURJPY re­mains tech­ni­cal bear­ish as long as prices can keep be­low the 135.50 re­sis­tance. Prices are trad­ing be­low the daily 20 SMA and the MACD has crossed to the down­side. The next rel­e­vant sup­port is based at 133.00.

GBPCHF:

The GBPCHF is tech­ni­cally bear­ish. Prices are trad­ing be­low the daily 20 SMA and the MACD has crossed to the down­side. As long as prices can keep be­low the 1.5000 re­sis­tance, there may be a de­cline to the next rel­e­vant sup­port at 1.4650.

CADJPY: The CADJPY ex­pe­ri­enced a break be­low the 89.50 sup­port. As long as prices can keep be­low the 93.00 re­sis­tance, there may be a de­cline to the next rel­e­vant sup­port at 88.00.

The GBJPY re­mains bear­ish as long as the 184.50 re­sis­tance holds. Lag­ging in­di­ca­tors such as the MACD point to the down­side and the can­dle­sticks re­side be­low the daily 20 SMA. The next rel­e­vant sup­port is based at 180.50.

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