Oil prices plummeted on Tuesday

Good morning from Hamburg and welcome to our latest Daily FX Report. A ship bringing about 1,800 migrants and refugees from an eastern Greek island to the port of Piraeus arrived on Tuesday night, the Greek coastguard said. Greece has seen a spike in the number of refugees and migrants arriving on the islands by rubber dinghies via nearby Turkey this summer, with aid agencies estimating about 2,000 crossing over daily last month. After a hiatus of a few days last week, Greek authorities on Saturday resumed carrying the refugees - mostly from Syria, Iraq and Afghanistan - to the mainland by ship from the islands of Kos, Lesbos, Samos, Symi and Agathonissi. Many then carry on their journeys across mainland Europe.

Anyway, we wish you a successful trading day!

Market Review – Fundamental Perspective

Activity in China's manufacturing sector contracted at its fastest pace in three years in August, according to official data, reinforcing fears of a sharper slowdown in the world's second-largest economy despite a flurry of government support measures. The Chinese government's PMI fell to 49.7 in August from the previous month's reading of 50.0. Japanese data went against the trend, with manufacturing growth the strongest in seven months, reinforcing expectations the economy will rebound from a second-quarter contraction. Adding to the nervousness, International Monetary Fund head Christine Lagarde said global economic growth was now likely to be weaker than had been expected just a few months ago. The S&P 500 is now 10 percent lower than its May record high, with the prospect of slowing global growth and an impending U.S. interest rate hike curtailing a robust bull run that saw the index gain over 200 percent from the depths of the financial crisis in 2009. Tuesday's was the S&P's worst drop since Aug. 24, when it slumped 3.94 percent after three days of increasingly volatile losses. Oil prices plummeted on Tuesday, settling 8 percent lower, as weak Chinese data extended a roller-coaster run that knocked oil to its lowest in 6-1/2 years last week before frenzied short-covering fueled a 25 percent three-session surge. The past few weeks have been among the most volatile in the modern oil market's three-decade history, with prices plunging early last week as worries about China's economic strength sent shivers through risk markets, only to bounce back fiercely as bearish traders rushed to cash in short positions.

Daily Technical Analysis

XAU/USD (Weekly)

Looking long-term, Gold has experienced a high volatility and the price moved to a low at around $1139. Since August 2014 it was moving in a range between $1303 and $1158. Recently the price sharply declined and just the support level around 1089.59 could stop the fall. The CCI is showing that the the metal is moving under the Center line upward as a signal for a possible recovery. The price touched once the highest Fibonacci resistance level (61.8).

Support & Resistance (Weekly)