The US market looked a little bit mixed today as US JOLTS job openings came in weaker than expected at 5.38M (5.50M exp) in the build up to Christmas. Many in the market had been hoping for a stronger result, but for the most part it was an okay reading for the US job market. For myself the US job market and in particular the US unemployment rate is quite low and some could argue that the job market is starting to get saturated at normal levels. This shouldn't come as any surprise when you consider the fact that growth globally and in the US has been quite sluggish over the past year so the ability for further job creation has certainly been a little harder.
This battle is more so obvious on the S&P 500 where we are seeing a large amount of volatility in the build up to D-day, or in this case the day in the December where Yellen is set to announce if there will be a rate rise. I struggle to see it happening at present, especially with the recent crush in the commodity sector and the stress it will cause globally. Turning back to the S&P 500 though it's clear that resistance at 2103 is holding stead fast and I certainly feel this level is quite strong given what we have seen recently. Support for the S&P 500 is also looking very strong at 2033, and any push to this level is likely to encounter strong pressure from the bulls looking to enjoy the last of this year before next year's inevitable rate rises.
The NZD is set to have an explosive 24 hours however in the lead up to the possibility of a rate cut from the Reserve Bank of New Zealand (RBNZ), this has been on the cards for sometime as the economy has faltered. And despite the recent pick up in the NZ economy the RBNZ is looking to continue to act to make sure that any threats of a recessions are staved off. Some have been arguing that a rate cut is not realistic, but most can agree that the recent commodity price falls have had a large impact and the NZ economy is not as healthy as the 'rock star' title it used to be known for.
For me the NZDUSD continues to be an exotic beast with big periods of very little volatility followed by strong trends. These trends tend to have a catalyst and many will be waiting on this rate cut to provide such an opportunity. Support at 0.6616 is likely to be the key level her as it has held up the NZDUSD for some time, a push up also prevents another interesting opportunity here as resistance at 0.6608 is a prime candidate for a rejection. If that does transpire then we would see a strong head and shoulders pattern forming and the bears would like to capitalise on this quickly.
Lastly, oil markets have been in utter turmoil over the last two days and this likely to continue, however recent data from today suggests we may see a slowdown in volatility. But in the end a push to $33.00 a barrel is realistic scenario and I personally feel that such an event would be short lived and present very bullish opportunities.
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