Market Movers of the Day
Asia-Pacific
*Japan’s markets closed on national holiday
*New Zealand’s Current Account Balance for 2Q surprised for the better at 0.12B
Americas
*US Leading Indicators rose 0.6% in August, less than market expectations
The Overall Sentiment
US market fell today with the S&P and the Dow closing around 0.3% down each in a session where profit taking came into play to erase some of the gains of the recent equities’ rally. The Dollar strengthened against all majors in a day with slightly low volume in the Forex arena with no key economic data releases and operators from Japan on holiday. Selling pressure was experienced in commodity markets as the rising Dollar diminishes their appeal as an alternative investment. Crude Oil retreated to $70 and Gold dropped for a third day to trade around $1000 pushing down commodity-linked currencies. The New Zealand dollar recuperated as New Zealand’s Current Account figures showed the narrowest deficit since 2004 driving the Kiwi to its highest level this year. The Pound continued to weaken reaching its lowest levels against the Euro in almost five months. The Yen lost ground against the greenback for a sixth day with the USD/JPY pair trading above 92.
The Day Ahead
With Japan still on holiday the day will start with New Zealand’s Westpac Consumer Confidence and Switzerland’s Trade Balance will follow as we move towards the US session. Market forecasts are optimistic about Canadian Retail Sales as last month’s positive data on Wholesale Sales and employment signaled that consumer demand could also show an improvement. US Housing Price Index will provide an estimate on current housing market conditions and the day will close with New Zealand GDP figures where a further economy contraction is expected but at the slowest pace in six quarters. Overall markets will be awaiting the Fed’s announcement on Wednesday which could shed some light on the future of its Quantitative Easing Program and the G20 statement on Friday about global recovery and exit strategies.
Technical Analysis
GBP/JPY DAILY
After trading in a bullish trend the first half of 2009 GBP/JPY double-topped slightly above 162 forming a broad channel around the 148-162 levels. The cross presents the opportunity to enter a short-term Long position as it is currently trading near the support just above 148 but the double-top formation should be kept in mind as it may signal a bearish direction for GBP/JPY’s next big move.
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.
