Markets brace ahead of China Q3 GDP report on Monday

Global Market

Global sentiment was dealt a blow this week as soft economic data from China renewed the concerns about its slowing pace of growth. Following a slight decline in global equities, escalating expectations that further monetary policy from China may be impending has translated to Asian equities venturing into green territory. With the looming China Q3 GDP report taking the spotlight, Friday’s trading session may conclude with some built up anxiety as market participants ponder on the possible outcomes over the weekend. If the world’s second largest economy fails to achieve its 7% Q3 GDP targets then global sentiment may be dealt a frightening blow once again. This may translate to a strong decline in Asian equities in the new trading week, regardless of the expectations of further monetary policy from China.

Dollar weakness remains the main driver in the global currency markets. As long as the diminishing expectations of a US interest rate hike in 2015 remains the main concern, more downside pressure in the USD may be expected. If CPI for China on Monday falls short of the 7% target, this may trickle back down to the USD exposing it to further losses. The Dollar Index remains technically bearish on the daily timeframe and additional USD vulnerability may open a path within this index to the next relevant support at 93.30.

The potential decline in economic momentum in the UK, combined with the fact that the BoE will likely push back the interest rate increase deep into 2016 has left the GBP exposed. The GBP remains in a state of sensitivity and if the upside momentum slows down next week, a riskoff environment that may be renewed from a China CPI which fails to meet expectations may open the GBP to additional downside pressures.

GBPNZD

The GBPNZD is technically bearish on the daily timeframe. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. The previous support at 2.2750 should act as a dynamic resistance. A breach below the 2.2400 level may open a path to the next relevant support at 2.1700.

SILVER

Silver is technically bullish on the daily timeframe. Prices are trading above the daily 20 SMA and the MACD has crossed to the upside. As long as prices can keep above the 15.55 support, there may be an incline to the next relevant resistance at 16.60.

Dollar Index

The Dollar Index is technically bearish on the daily timeframe. A breakdown below the 94.00 support may open a path to the next relevant support at 93.30.