Bank earnings reports loom large

Peter Iosif, ACA, MBA IronFX

USD treads water

The USD slipped in the FX market in today’s Asian session, relinquishing some of Monday’s gains. It should be noted that today is the first day after the prolonged weekend, given the US public holiday yesterday, and the slipping of oil prices may have weighed on the greenback. In Australia, RBA’s September meeting minutes were hawkish as the document kept the door open for more monetary policy tightening and in tomorrow’s Asian session, Aussie traders may keep a close eye on China’s trade data for September.

US stock markets await earnings reports

US stock markets seem to be sending out mixed signals and the market is focusing on the earnings reports of major US banks in today’s trading hours. The releases of JPMorgan, Goldman Sachs, Wells Fargo and Citigroup are to closely watched and possibly better-than-expected revenue and EPS figures, accompanied by a robust forward guidance could lift the market sentiment, supporting US equities.

Oil prices slip

Oil prices tended to slip as on a fundamental level, market worries for the Houthi hits on Saudi Arabia seem to ease, while the US-Russian deal is expected to boost supply of diesel in the markets easing the market’s tightness somewhat. Nevertheless, we still consider the situation in the Gulf region as fragile and a possible escalation of tensions could drive oil prices higher again.

Gold’s price remains steady

Gold’s price remained relatively steady yesterday. The negative correlation between the precious metal and the USD seems to have been interrupted, given the strengthening of the USD over the past week. Yet we highlight central bank gold purchases and especially the buying spree of China’s PBoC as possible reason behind the resilience of precious metal’s price. 99474216

Other highlights for today

Today we get Germany’s and the Czech Republic’s final HICP rates for September in the European session and later on we get the US existing home sales for the same month. On a monetary level, please note that Fed Board Governor Waller, ECB Board Member Lane and Boston Fed President Collins speak. In tomorrow’s Asian session, things start to heat up as we get from China the trade data and inflation metrics for September.

Charts to keep an eye out

XAU/USD remained relatively stable yesterday and during today’s Asian session. We maintain our bias for a sideways motion of the precious metal’s price to continue. Also the RSI indicator remains near the reading of 50, implying that the bearish market sentiment for gold’s price tends to remain weak, which may allow the sideways motion to continue. Should the bears regain control over the direction of gold’s price we may see it breaking 3960 (S1) support line and start aiming for the 3600 (S2) support level. Should the bulls take over, gold’s price may break the 4275 (R1) resistance line and start actively aiming for the 4550 (R2) resistance base.

Nasdaq (US 100 Cash) edged lower yesterday breaking the 30770 (R1) support line, now turned to resistance. We recognise the bearish tendencies of the index’s price action, yet also note that the RSI indicator has dropped signalling an easing of the bullish market sentiment, yet has not signalled any bearish predisposition of the market for the index. Should the bears take full control over Nasdaq’s price action we may see it aiming if not breaking the 29675 (S1) support line. Should the bulls take over, Nasdaq’s price action could break the 30770 (R1) resistance line and opening the way for the 32500 (R2) resistance level.

Calendar follows

XAU/USD daily chart

Support: 3960 (S1), 3600 (S2), 3250 (S3).
Resistance: 4275 (R1), 4550 (R2), 4890 (R3).

US 100 Cash daily chart

Support: 29675 (S1), 28200 (S2), 26870 (S3).
Resistance: 30770 (R1), 32500 (R2), 34000 (R3).

Author

Peter Iosif, ACA, MBA

IronFX

Mr. Iosif joined IronFX in 2017 as part of the sales force. His high level of competence and expertise enabled him to climb up the company ladder quickly and move to the IronFX Strategy team as a Research Analyst. Mr.

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