It seems that the doves are out in force today for the FED as recent comments from vice-chair Fischer have cast a shadow of doubt that a rate hike might actually be this year, obviously it is data driven and it has so far been a mixed bag despite the recent non-farm result which showed real strength in the labour market. For me it still feels that the FED is waiting on the prospect of a pickup in inflation, something which does not look that far around the corner given the recent drop in oil prices yet again and there resilience to look anything like bullish over the last few weeks.
As a result of the dovish FED, the USD traders have looked to exit and there has been a strong push up for the EURUSD to touch the 20 day MA. With the recent ECB talk of providing stimulus it's likely this will be a short lived push, the market expects Draghi to deliver and he generally has. For me any push higher is going to be short lived just based on the fundamentals at hand which is a stronger USD as a of late, and the push for a weaker Euro. With that being said resistance at 1.0831 is looking like a reversal opportunity. What will be of major interest here is if the market tries to push through this level, but I am guessing with tomorrows conference by Draghi we may see his usual jawboning of the Euro and a case for setting the scene for Decembers possible stimulus.
Gold has had a slight reprieve from the bears, but it's not looking like all good news for the bulls who have rushed back in for the short term gain. Gold has so far managed to lift on the back of a weaker USD today, but it's short lived I feel based on the very solid rejection at resistance at 1082 at present. Despite the push through, markets have so far tried to stop any further rises. On the lower time frames - more importantly the H1 - we have seen a golden cross occur with the 20 MA and the 50 MA, a bullish signal, and if we can see a push through resistance at 1082 then we could see a further run to 1104. Gold has been a bearish target for some time and will likely to continue to be so, but in the short term there and can be good opportunities for the bulls.
Lastly the GBPUSD has benefited from the USD weakness today as it lifted quite high, but earlier suffered at the hands of weak UK data. Retail sales showed some weakness for the month of October dropping to -0.6% m/m (-0.5% exp) and many will be hoping that this is not a sign of things to come in the build up to Christmas which traditionally is a very busy time and important for the economy. With the push higher it has so far been viewed as another wave and we have a tight wedge forming on the D1 that markets will look to play off. So while there is further momentum lower I do see the top trend line of the wedge paying a pivotal role to contain any bullish movements.
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