The dwindling expectations that the Fed will be hiking US rates in 2015, coupled with a renewed risk-off environment following the soft China data on Wednesday, has resulted in gold surging to a three and a half month high. This precious metal has breached the 1170.0 resistance and attained a daily close above the firm 200 SMA. Due to elevated global economic uncertainties and ongoing confusion regarding central bank intentions, investors are hesitant to look towards currencies and are instead focusing their attention on gold. Currently technically bullish, ongoing USD vulnerability may invite a further incline to the next relevant resistance at 1200.00 in the near future.
Dollar weakness has had a muted impact on WTI which has suffered an aggressive profit-taking and lost around $4.45 to trade around $46.20. The concerns over a slowdown in global demand for oil has deepened after soft economic data from China raised questions about its ability to achieve its golden 7% year end growth target. With WTI’s central theme of oversupply remaining intact, the new burden of potentially diminishing global demand may extinguish any bullish rallies within this commodity moving forward. WTI has turned technically bearish on the daily timeframe and any additional fears about demand which may be derived from China should send prices back to the gravitational $44.00 support.
A renewed risk-off environment translated to global equity markets losing steam, with most major European, Asian and American equities venturing back into red territory at the end of Wednesday’s trading session. Asian equities have ventured back into green territory in Thursday’s trading session as a result of soft economic data from the States pushing back expectations of a US rate hike. Economic data in October from most major economies has been nothing but disappointing and optimism about the health of the global economy slowly fades away. With uncertainty shrouding the financial markets, investors may flock to safe haven assets such as JPY and gold which should translate to more losses within the equity division in the near future.
The AUDNZD is technically bearish on the daily timeframe. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. Prices have hit the 1.0700 support with the next relevant support based at 1.0600.
The CHFJPY is technically bullish on the daily timeframe. Prices are trading above the daily 20 SMA and the MACD has crossed to the upside. A strong breach above the 125.00 resistance may open a path to the next relevant resistance at 126.00.
The EURNZD is technically bearish on the daily timeframe. A breakdown below the 1.6800 support may open a path to the next relevant support at 1.6400. A daily close back above the 1.7200 resistance invalidates this daily bearish outlook.
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