Forex
EUR
The euro is steady before the European Central Bank meeting later today. The currency is headed for 1.158 as its target mark, if the bank’s statement is hawkish the euro could reach this point.
USD
The dollar has strengthened after hitting a 10-month low on Tuesday. The dollar’s ditched 1% this week thanks to a dovish Fed, weak economic data and a flurry of mishaps from Washington.
EURUSD
From a technical side, the EURUSD is headed for overbought territory as moving averages are sloping downwards. However, the RSI curve is touching 40, indicating it may be oversold.
Fundamentals look to be strong, given the recent robust readings from Europe we could look forward to a hawkish (positive) ECB statement which could send the EURUSD higher.
AUD
The Australian dollar climbed higher following supportive unemployment data, coming in at 5.6% for June. If employment figures continue to improve it could cause the Reserve Bank of Australia to alter its monetary policy course and raise interest rates.
This fits in with the broader narrative: a global shift in monetary policy sentiment- in that – major central banks are moving towards a stance of increasing the cost of borrowing – a bullish rhetoric for many major currencies.
AUDUSD
The momentum curve is shifting upwards after reaching oversold territory. However, the moving averages and RSI curves are still on bearish ground.
JPY
The Japanese yen dropped 0.1%. As perceived risk in the market subsides, investors pare off bullish bets in safe-haven assets.
USDJPY
This pair is overbought at 70 on the RSI curve. We could see some bearish movements coming up later today.
Global Equities
European stocks are making modest gains before the ECB conference later today.
The US technology rally is steady after reaching new highs in yesterday’s trading session, surpassing values seen back in the dotcom bubble. Investors are enthusiastic about the sector following rapid profit expansion despite the lagging US economic backdrop.
Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) (Google), Visa, Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) are among the biggest winners.
Commodities
Oil
After a bigger-than-expected drop in US inventories, we saw oil rally in yesterday’s session.
The oil market is particularly sensitive to bearish news right now and less sensitive to bullish readings.
However, defiant and exempt OPEC members as well as the robust US oil industry have presented an insurmountable barrier for oil. Only a relentless fall in total US storages will hurl oil from this bearish market, but so far, we’ve seen stockpiles swell.
Saudi Arabia’s efforts to re-balance the rise in Libyan and Nigerian supplies by reducing output by 1m barrel a day is an admirable approach. The cartel would ensure investors that they will do “whatever it takes” to revitalise the market, instead of the ‘just about enough’ approach they took in March – when they simply extended supply curbs. If Saudi Arabia make the cuts we should see oil tip above $50 again.
Crude Oil
