Global sentiment receives another blow, USD looks sensitive

October 05

08:35 2015

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Global Market: Friday’s unimpressive NFP release from the States dealt a sharp blow to the global markets which resulted in the renewal of investor concerns. Sentiment has weakened and this may ripple into equity markets as the prospects of a US rate hike in 2015 slowly diminish.

A great deal of anxiety continues to cloud the financial markets including the slowing growth in China, emerging market weakness, stagnant growth in Europe and Japan, and falling commodity prices. This unexpected lower number of jobs created in the United States will encourage anxiety that the US economy might be slowing down, which would weigh heavily on already continual concerns over the global economy.

With US interest rates being left unchanged in September and this NFP hurting investor sentiment, most participants think that the ship has sailed for any US interest rate rise in 2015. The USD is now in a state of heightened sensitivity and any pushed US interest rate expectations will leave the USD exposed and vulnerable to further losses. The Dollar Index which has meandered around the 96.50 regions plummeted to the lows of 95.21 on Friday before clawing back some losses. Additional USD weakness may inspire a bearish move within the Dollar Index to trade to the next relevant support based at 94.00.

Gold was provided with a substantial level of bullish momentum as a result of the USD vulnerability on Friday. This precious metal which had previously been exposed to an extended period of pressure from the prospect of a US rate hike in 2015, surged with aggression clipping above the 1140.0 level. Investor anxiety and renewed concerns about the global markets may aid this yellow metal not only to regain some of its previously lost safe haven glimmer, bur provide a foundation for bulls to send prices to the next relevant resistance at 1154.0.

In the commodities arena, WTI continues to meander within a zone of consolidation with support at $44.00 repelling any attempt for a decline to the downside. The $44.00 support has held since the start of September as the market awaits the next major economic data release or theme. The elevated concerns over the global economy could lead to fears that there will be less demand for oil, which may act as the next major catalyst for a major selloff.

EURUSD

A weak NFP release on Friday has resulted in USD weakness. The EURUSD experienced an upsurge on Friday before gains were taken back before the end of the session. EURUSD must keep above the 1.1100 support for a bullish move to the next relevant resistance at 1.1400.

GBPUSD

Dollar weakness resulted in an upsurge within the GBPUSD on Friday. GBPUSD remains technically bearish on the daily timeframe as long as prices can keep below the 1.5250 resistance. Prices still remain below the 20 daily SMA and the MACD trades to the downside.

AUDUSD

The AUDUSD remains technically bearish on the daily timeframe as long as prices can keep below the 0.7150 resistance. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. The next relevant support is based at 0.6950.

EURAUD

The EURAUD currently trades within a range with support at 1.5600 and resistance at 1.6250. The MACD trades to the upside, but prices marginally trade between the daily 20 SMA. A breakdown below 1.5600 may open a path to the next relevant support at 1.5250.

USDCAD

The USDCAD is technically bearish on the daily timeframe. Prices are trading below the 20 daily SMA and the MACD has crossed to the downside. A solid daily close below the 1.3150 support may open a path to the next relevant support based at 1.3000.

EURJPY

The EURJPY remains technical bearish on the daily timeframe as long as prices can keep below the 135.50 resistance. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. The next relevant support is based at 133.00.