Market Movers of the Day
Asia-Pacific
*Bank of Japan left benchmark interest rate unchanged at 0.1%
Europe
*UK Retail Sales in August came unexpectedly unchanged from a month before
*Euro-zone Trade Balance better than expected at 6.8B euro
*Swiss National Bank left its key interest rate unchanged at 0.25%
Americas
*Canada’s Consumer Price Index dropped 0.8% in August on an annualized basis
*Canadian Leading Indicators gained 1.1% in August
*US Initial Jobless Claims unexpectedly fell to 545K
*US Continuing Claims rose to 6230K
*US Housing Starts rose to 598K in August meeting market expectations
*Philadelphia Fed Manufacturing Index climbed more than expected to 14.1 in September
The Overall Sentiment
US stock markets fell retreating from their highest levels in 11 month with the S&P closing down 0.3% and the Dow losing 0.1%. In a day with mixed economic data flowing to the markets the Dollar had a volatile session against its major counterparties. Initial Jobless Claims unexpectedly dropped last week but were counterbalanced by a rise in Continuing Claims. Positive Housing Starts figures met forecasts signaling a measured improvement in the housing market. The Philadelphia Fed Manufacturing Index gained more than market estimations reaching its highest levels in more than two years driven by gaining shipments but with employment and orders components decreasing the manufacturing sector showed relative underlying weakness suggesting that a forceful recovery is improbable. The Canadian dollar hit an intraday 11-month high as Canadian Leading Indicators climbed in August the most in seven years spurring optimism about the Canadian economy and bringing risk-appetite into play. The Australian and New Zealand dollars also climbed to intraday highest levels in more than a year driven mainly by overall Dollar weakness as commodities ended the session rather flat and there was no significant economic data coming from the pacific region. The Pound had another hard session as more dissatisfying figures about the British economy were released with UK’s Retail Sales remaining unchanged from July. The Euro continued to show strength as the Euro-zone Trade surplus rose to its highest level in five years. In Japan the BoJ left interest rates unchanged and its policy makers stated they remain cautious about the economy showing signs of recovery as there’s still risk to the downside.
The Day Ahead
The day will start with expectations of volatility for the Yen as the BoJ will release its monthly study of Japan’s economy and the Leading Economic Index will forecast economic conditions for the short and mid-term. Positive data is expected from Germany’s Producer Price Index which is followed as an indicator of consumer inflation. Market estimations point to an increase in Canada’s Wholesale Sales which will indicate positive sentiment in consumer spending and retail sales adding to signs of optimism about the Canadian economy.
Technical Analysis
AUD/JPY DAILY
AUD/JPY continues to trade in range for the fifth week now moving back and forth across a channel with supports at 76.50 and an upper boundary just below 80. The recent bearish cycle stalled at 77.50 followed by some bullish sessions that brought the cross back to the upper boundary. It presents an opportunity to enter a Short position to keep exploiting the sideways trading while it lasts. Stop loss orders should be placed above 80 and entering a Long position ought to be considered if that resistance is finally breached.
Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.
