It was slow going for markets today, but all was not lost as a large amount of revealing information was released by the FED from the FOMC minutes out today. Certainly the topic of a rate rise has been running hot in articles and in the markets as of late, and certainly I am coming around to the real possibility of such a thing happening - if inflation lifts a little more. However, the most recent FOMC minutes left the market slightly perplexed as there was no debate on a rate hike, infact the FED will now use its next December meeting as the time to debate a rate rise. Is this a surprise... not really. The FED has shown time and time again that its dovish nature is a dominating feature in the market place, and so far we have only fulfilled two of the three points the FED looks to address; these are, nearly full employment in the US economy, and no signs of financial shocks on the horizon. The only faltering point as mentioned above by me is inflation. When we look at inflation with factoring commodity prices we get a positive view, but in reality inflation expectations are very much up in the air with the recent drive lower for oil prices.
This dovish nature from the fed leaves us in a very interesting place, but equity markets were more than happy to pause and listen before the bulls took flight on the dovish news. The recent rise has so far looked quite good, and for now traders will be focused on resistance at 2103 at this stage, as this once again comes across as a striking point in the market if we are to see any solid further gains. Obviously higher than this we in turn end pushing resistance at 2128 and this is an area where the market tends to be a little weaker and less inclined to push above. Certainly, a push through 2103 looks certain to have a crack at 2128, but above that I am less inclined there is enough momentum to sustain that.
Gold had a mixed day much like the markets, and the bears had a brief crack at gold before waiting to see the outcome of the recent technical plays. Despite the recent push lower we have just ended up with support at 1066 and the market looking like it may try and find some ground instead of losing it. On the H1 the 50 MA is looking very strong and I would certainly be fixated here on the possibility of a golden cross forming with the 20 MA and seeing a run higher on the charts in the short term. Overall though I am not too sure if gold has much time left - given the falls it has suffered over the last few years.
Lastly, oil has continued to be a genuine driver in the market today as crude oil inventories showed a smaller figure, but despite this it was still a surplus of 0.25M barrels. Nothing too large, but it still shows there is a genuine lack of demand in the market, and we could see the bears take a further swipe and push lower to 39.88 again, but the question will be if we can find any momentum to break this and hold below. History for oil prices tells us that this is likely to be unrealistic.
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