It's been an interesting Monday for the markets as the fallout from non-farm payroll continues to take a toll on the market recently, and especially the USD. For many the weak reading of 38k (168k exp) for non-farm payroll was a monumental wakeup call that the US labour market may be saturated or even starting to turn significantly after the large non-farm readings we have been seeing over the previous years. For the FED it was a moment of worry given that the labour market is a cornerstone for the economy and the justification to lift rates higher in the current economic climate. Yellen's speech today also showed that while she was positive about the market, the uncertainty factor with the upcoming election and the recent turn of events will weigh heavily on the FED's outlook and may lead to a slowing of gradual rate rises.
With a weaker USD and the FED looking to keep monetary policy the same, the benefactor was the S&P 500. After showing reluctance to jump any higher it managed to push much higher as it touched on resistance at 2111 before retreating slightly. This level has been key for some time, as no candle has yet closed above it and any candle to do so would spark a bullish movement in the long run. Any pull back has met support at 2093 and the market will be watching this area keenly to see if any trend can be found in the equity market, especially around the S&P 500.
Oil has so far struggled as well in the current market environment and it's looking all the more likely that the prices will struggle to get the highs previously seen in 2008/2009. At present there has been no economic news out to bolster the market, but at the same time it's worth taking notice of the patterns forming in the oil market as they will have a big impact over the next few days as technical's look to take hold.
On the H1 chart oil has so far been pushing itself higher in an upward trend but this forming an ascending triangle that is likely end in a squeeze at 49.88 which is a major level of resistance acting as a ceiling for the oil bulls out there. For me this looks likely to lead to a bullish breakout unless we see any fundamental changes, but it also may be a case of the market looking at the upcoming crude oil inventory figures due out on Wednesday.
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