The NFP is quickly approaching, so we can expect increased volatility in the USD crosses as well as gold as we get closer to Friday. Yesterday two different FED officials kept the door open for an interest rate increase next month, so for this to be really a possibility, strong data is needed. In any case, it was enough to cause a strengthening of the USD yesterday.
There is more than enough news today as well, so make sure to check the economic calendar.
Currencies
EUR/USD – the important level of the trend line was shortly broken, but quickly moved back below this level, once again reinforcing the importance of this trend line. In addition to that we are also trading below the psychological 1.15 level.
USD/JPY – fell short of reaching the support level around the 105.3 level, before moving up, as the USD strengthened across the board as the day progressed yesterday. We are seeing a continuation of this move so far. Also BOJ Governor Kuroda said once again that the BOJ would take further action if needed.
GBP/USD – here as well we can see that the important resistance was able to hold, and we moved sharply down due to a combination of the strengthening USD and the bad data out of the UK which also weakened the GBP.
Indices
DAX 30 – is trading below the psychological 10,000 level again as the markets are worried again on the state of the global economy.
Comodities
Gold – attempted again to base itself above the 1300 level, but once again was not able to do so. As a result, in addition to a strengthening USD, we are likely to test the support around the 1276 level.
Oil – saw another sharp drop as it remains unlikely that there will be any concerted effort to curb production as well as a small increase in the crude stock. As always on Wednesday, the most important factor will be the inventories and production in the afternoon. On the chart we can also clearly see the fight of what was the support around the 44.50 level.
Stocks
Royal Dutch Shell (LON:RDSa) – was able to post better than expected earnings as it offset lower oil prices by earning more from its refining and chemicals production.
By Shawn Koopman