A sense of positivity ripples across the financial markets ahead of the awaited US NFP release on Friday, as gains were viewed across the global equity markets. The firm PMI readings from the Eurozone have offered a welcome boost to European equities and as a result, most concluded positively in Tuesday’s trading session. Asian equities have also ventured back into green territory with the Shanghai Composite Index which has been under an extended period of pressure, trading 4.08% as of writing. This upward momentum may leak into the New York session later today, which may result in American equities posting further gains. Although the fears about China’s deceleration are still present, this has been set aside as market participants speculate on whether the NFP release on Friday will meet expectations.
Sterling bulls clawed back most of the losses against the USD as Tuesday’s firm construction PMI announcement mitigated some fears regarding the potential slowdown in economic momentum within the UK economy. Economic data in November has started strong for the UK and the reinforced expectations that growth in Q4 may exceed expectations should instill bullish momentum into the GBP. This week’s focus for the Sterling remains the BoE policy meeting on Thursday in which a UK November rate hike is highly unlikely. The additional focus may be placed on the inflation report which should suggest that inflation in the UK may remain depressed in the near term. Nevertheless, Sterling bulls rev and a hawkish BoE Carney should result in the GBPUSD challenging the 1.5500 resistance.
In the commodities arena, Gold continues to tumble as anxious market participants speculate on the prospects of a US rate hike in 2015. Moving forward, any positive economic data releases from the States which fortifies the possibility of a US rate hike may continue to depress the prices of this precious metal. Whilst Gold remains heavily bearish technically, the trigger for a concise move will be on Friday. If the NFP does exceed expectations, then we may see this yellow metal decline back to July’s monthly low of around the 1080.00 level.
The EURGBP is technically bearish on the daily timeframe. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. The next relevant support is based at 0.7025.
The AUDCHF is technically bullish on the daily timeframe. Prices are trading above the daily 20 SMA and the MACD has crossed to the upside. As long as prices can keep above the 0.7000 support, there may be an incline to the next relevant resistance at 0.7200.
The EURCAD is technically bearish on the daily timeframe. A breakdown below the 1.4250 support may open a path to the next relevant support at 1.3950.
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