Market Summary
Asian markets ended mixed as most edged higher on investor approval for the possibility of tax reform in the U.S., while Chinese-linked markets declined on caution ahead of the week-long National Day holiday in mainland China.
European markets endured a choppy session, ending higher for the sixth consecutive session, and reaching a two-month high in their longest winning streak since April. London’s FTSE also advanced, as banking shares moved higher in anticipation of rising interest rates in the U.S. and speculation that rates will also rise in the U.K. by the end of the year.
U.S. markets ended modestly higher after early session weakness, with the S&P 500 and Russell 2000 both hitting new record levels. Gains were broad based across most sectors, with the materials sector leading, while the industrials lagged.
Today’s Assets
AUD/USD
The pair traded down to 2 pips below the 0.7800 level Thursday before rebounding and ending the day nearly unchanged. The resulting candle is a perfect hammer formation, a very bullish reversal candle, especially as it comes right at a support level. A rally from here could see the pair rising 150 pips before encountering resistance.
GBP/USD
The pair halted a four session slide, ending back above the 1.3400 level after the Bank of England’s chief economist spoke out in favor of a U.K. rate hike by the end of the year. This hawkishness could see the pair continue higher Friday, possibly testing levels around 1.3520 for resistance.