Asian markets have rebounded to make gains during a volatile morning. China’s Shanghai composite closed up more than 2% as the government suspended its controversial circuit breaker system which led to trading being halted on 2 occasions this week. News that state controlled funds were buying Chinese stocks on Friday also helped to steady the ship.
Hong Kong’s Hang Seng & Japan’s Nikkei indexes have also posted mild gains halting 4 straight days of losses, however Australia’s ASX posted its worst week since July 2011, down almost 7%.
Gold’s safe haven appeal strengthened the precious metals value as it reached highs of 1113 early this morning although has since retraced back around the 1100 mark.
With today’s hugely anticipated NFP, the first since the FEDs rate hike last month, investors will be eagerly watching for some strong data to provide some comfort that at least the US has its house in order despite concerns over the world’s economy.
EUR/USD made a strong recovery yesterday climbing to above 1.0930 although today it seems its business as usual and is now back around 1.0860 at time of writing. GBP/USD’s woes continue as the pair slipped to a new 4.5 year low of 1.4532 before recovering back just above 1.4600. Poor economic data continues to come out of the UK, which will dampen any expectations of an early rate hike.
USD/CAD also reached a high of 1.4168. its highest rate since August 2003 and AUD/USD recovered back above 0.7000 after hitting a 3 month low at 0.6980.
Oil has temporarily at least, recovered back above $34 although ongoing concerns about global growth will not go away so further downside cannot be ruled out.
Trading quote of the day: “A great trader is like a great athlete . You have to have natural skills, but you have to train yourself how to use them.” – Marty Schwartz, Pit Bull
Green lines are resistance, Red lines are support.
EUR/USD
Pivot: 1.0825
Likely scenario: long positions above 1.0825 with targets @ 1.0945 & 1.099 in extension.
Alternative scenario: below 1.0825 look for further downside with 1.077 & 1.071 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
GBP/USD
Pivot: 1.459
Likely scenario: long positions above 1.459 with targets @ 1.468 & 1.4725 in extension.
Alternative scenario: below 1.459 look for further downside with 1.455 & 1.45 as targets.
Comment: the RSI is mixed to bullish.
AUD/USD
Pivot: 0.6985
Likely scenario: long positions above 0.6985 with targets @ 0.7085 & 0.713 in extension.
Alternative scenario: below 0.6985 look for further downside with 0.693 & 0.69 as targets.
Comment: the RSI is bullish and calls for further upside.
USD/JPY
Pivot: 117.35
Likely scenario: long positions above 117.35 with targets @ 118.8 & 119.3 in extension.
Alternative scenario: below 117.35 look for further downside with 116.75 & 116.1 as targets.
Comment: the RSI is bullish and calls for further upside.
USD/CAD
Pivot: 1.4045
Likely scenario: long positions above 1.4045 with targets @ 1.417 & 1.4245 in extension.
Alternative scenario: below 1.4045 look for further downside with 1.397 & 1.3915 as targets.
Comment: a support base at 1.4045 has formed and has allowed for a temporary stabilisation.
GOLD
Pivot: 1095
Likely scenario: long positions above 1095 with targets @ 1113.2 & 1123 in extension.
Alternative scenario: below 1095 look for further downside with 1084 & 1075 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
OIL
Pivot: 32.1
Likely scenario: long positions above 32.1 with targets @ 34.3 & 35.15 in extension.
Alternative scenario: below 32.1 look for further downside with 31 & 30 as targets.
Comment: the RSI broke above a declining trend line.
DAX
Pivot: 10230
Likely scenario: short positions below 10230 with targets @ 9750 & 9630 in extension.
Alternative scenario: above 10230 look for further upside with 10425 & 10625 as targets.
Comment: the RSI is bearish and calls for further decline.
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