Daily Markets Broadcast

Andrew Robinson MarketPulse

Wall Street consolidates after heavy losses

US indices saw wild swings yesterday and struggled to gain any solid traction after recent losses. Both the US30 and NAS100 indices are attempting to regain the 200-day moving averages. Bonds rose due to rotation from stocks which pressured yields and the US dollar. US CPI data came in below forecast yesterday adding to the pressure on yields. Today we see Germany’s consumer price data.

NAS100USD

Source: Oanda fxTrade

The NAS100 index is seeing a mild rebound from 4-1/2 month lows following a 10.6% sell-off from the start of the month
The index has regained a foothold above the 200-day moving average at 7,054. Stochastics momentum indicator has turned bullish, crossing back above the oversold threshold
US Michigan consumer sentiment index is expected to rise to 110.4 in October, further confirming a strong US economy

DE30EUR

Source: Oanda fxTrade

The Germany30 index fell for a seventh straight day yesterday, touching the lowest since December 2016. ECB officials said tight labor markets and slow wage growth will eventually push up core rates
The 55-month moving average at 11,190 could be the next technical support point. The index has held above this moving average on a closing basis since Dec 2011
Germany’s September CPI data is due today and are seen rising at the same pace as August, 0.4% m/m and 2.3% y/y. Higher than expected numbers would be negative for sentiment as it may force the ECB to start hiking rates earlier than is currently forecast

XAUUSD

Source: Oanda fxTrade

Gold posted its biggest one-day gain in more than two years as it regained its safe-haven label amid a weakening US dollar
The commodity broke out of the 1,220 – 1,180 trading range that had been in place since August. The 100-day moving average at 1,228.99 could act as near-term resistance
The US dollar weakened as US yields eased off from recent highs following a strong 30-year auction and as investors rotating from stocks to bonds sought Treasuries

Author

Andrew Robinson

MarketPulse

A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentar

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