US markets have fired up today as ADP non-farm data was more positive than anticipated by the markets coming in 182k (180k exp). Generally speaking this is not a bad result as this time of year can be lacklustre in regards to employment data, so this certainly boosts. In addition to all of this, we saw a boost in the US trade balance to -40.8B, while at the same time ISM non-manufacturing PMI lifted to 59.1 - a very strong reading, and a little surprising given then recent troubles that have been abound in the US economy.
This positive data has also been on a day where we have seen comments from the FED about the possibility of a rate rise in December, as they referred to it as still a "live" date going forward. It does remain a possibility it'll give the market that, but what lacks at the moment is inflation data out of the US and the reality that lifting rates to early could do more harm than good. I don't see why Yellen would rush this a few months early when she has been waiting this long so far.
A classic example of the market's reaction could be seen in the S&P 500 as it failed to break through resistance and instead we saw the markets remain coy about the possibility of a rate rise. Certainly it looked like the market was quite unsure as it rejected movements higher off the resistance level at 2103. This looks like a little bit of profit taking at this time, but a lift in interest rates or even talk could lead to some faltering in US equity markets as all the cheap capital dries up. Either the deep bullish push we saw over the last few days may find some strong sellers as it looks to claw back some of the ground that was recently relinquished.
Gold markets were also playing of technical's nicely. Yesterday I mentioned at length the likely hood of further selling in gold markets, as the market overall was looking very bearish after the recent drop through the technical channel. Throwing further weight behind this was the positive US data today and the talk of rates being lifted by the FED - a heavy combo for most. Today's movements saw a retrace higher following by a sharp rejection of the trend line and a fall now down to support at around 1104. What will be really interesting is we see gold fall any further at this given time and crack through support and look to find further levels at 1082, which lately has seen a lot of interest and action.
The NZDUSD is looking very aggressive from a bearish perspective, as it finds itself in most traders spotlight given the volatility. After the recent drop through on the D1 it finds itself under pressure from the 50 MA which may see a balanced approach bought back into the market with some bulls returning. I wouldn't hold my breath here and a fall to support at 0.6500 is looking more and more on the cards, and even a fall past 0.60 at some point.
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