Global Market

Dollar vulnerability continues to take center stage within the global currency markets. Sentiment remains bearish for the USD and this may be reflected on the Dollar Index which has declined to a new daily low of 95.09. A dovish tone from the FOMC meeting minutes on Thursday may provide additional USD weakness which should translate to the Dollar Index declining to the next relevant support at 94.00.

Following the sharp appreciation experienced within Gold on Wednesday, the precious metal currently consolidates around the previous 1145.0 resistance as of writing. This yellow metal remains technically bullish and any additional USD weakness combined with renewed concerns about the global markets may provide a foundation for an incline to the next relevant resistance at 1154.0.

The BoJ press conference concluded on Wednesday with the central bank refusing to take any fresh stimulus measures. Japan’s falling exports and a decline in commodity prices which have punished its 2% inflation target for 2016 did not offer a compelling reason for the central bank to expand stimulus measures. The mounting pressures regarding the worries about a Japanese recession in addition to the fading expectations that the Fed will raise rates in 2015 may offer a solid argument to why the BoJ may induce additional stimulus measures in the next meeting on the 30th of October.

The escalating expectations that further monetary policy from China may be forthcoming has translated to the Shanghai Composite Index concluding Thursdays trading session 3% higher. China has had five interest rate cuts since November which have had a negligible impact on the economic slowdown. Data on Wednesday illustrated that China’s foreign exchange reserves have dropped considerably by $43.26 billion in September compared to the $93.93 billion in August. With such releases suggesting that the Chinese central bank may implement further monetary policy, more upside momentum may be expected within the Shanghai Composite Index in the near future.

USDCAD

USDCAD remains technically bearish on the daily timeframe as long as prices can keep below the 1.31500 resistance. The 1.3000 target has been reached and a daily close below this level may open a path to the next relevant support based at 1.2900.

USDJPY

The USDJPY remains technically bearish on the daily timeframe as long as prices can keep below the 121.70 resistance. Prices are trading below the 20 daily SMA and the MACD has crossed to the downside. The next relevant resistance is based at 118.50.

EURGBP

The EURGBP has bounced from the daily 20 SMA. The MACD trades to the upside and the next relevant resistance is based at 0.7440. A move below the daily 20 SMA suggests bullish weakness.

USDSGD

The USDSGD is technical bearish on the daily timeframe. Prices are trading below the 20 Daily SMA and the MACD is in the process to trading to the downside. As long as prices can keep below the 1.4250 level, there may be a decline to the next relevant support at 1.3950.

 

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