The USD was a shining star tonight as it lifted on the charts on the back of US unemployment claims data coming in positive at 267K. Despite all of this markets were upbeat and continued to show resilience in an overall negative day.
S&P 500 traders were upbeat at the end of the day, despite markets looking to push equity markets lower. I for one was surprised with the downward pressure for the most part. Market levels for resistance are looking very solid at 2112.86 in the long run but I am still concerned as the American economy has so far been rather rocky and it could continue to do so in the short term until we see the FED react.
The Aussie dollar was among the few that continued to fire in the current economic climate but for all the wrong reasons. Building approvals were an absolute shocker recently as they dipped to -8.2% m/m, showcasing the weakness in the Australian property sector which has so far been a mainstay for the economy. For the AUDUSD going forward I expect that it will continue to remain under serious pressure, the question is now if that the pressure can be sustained. I certainly feel that it can not be sustained for the Australian economy and we could very well see some real pressure soon. Either way resistance at 0.7302 is likely to be a very hard level within the current market.
USDJPY traders have so far enjoyed some strong runs on the charts, but as we near higher highs it has certainly cooled off. At the moment resistance at 124.448 has been looking very strong on the charts and it's likely we will see testing of this key level. In addition to 124.448 we also have the golden level of 125.073 which is the level to be broken if there is a run on the pair. How likely is such a run? Well it's hard to tell at this stage as it all circles around inflation/CPI data that we get regularly. The IMF is predicting that Japan may fall just short (not that I trust them), but never discount the BoJ in general as its aggressive policy making is something to behold in the last few years. So going forward we are going to see some ranging between the levels I have mentioned but for the most part expect the USDJPY to continue to be bullish.
Lastly Oil has managed to find some bullish reprieve on the charts, but the more I look at it the more it looks like a dead cat bounce. Certainly I still feel that support at 44.33 is the key level here and oil despite the recent swing upwards is heading in that direction regardless of what many in the market may be saying at present.
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