Market News & Analysis


Top Story

US Data Better than Expected, DXY Making a Delayed Bounce

Manufacturing PMI for November released earlier showed that activity increased to 52.2 vs and expectation of 51.5 and 52.3 last.  A reading of 50 or greater shows economic expansion, while a reading of below 50 shows economic contraction.  In addition, consumer sentiment was better than expected.  The Michigan Consumer Sentiment for November was 96.8 vs and expectation of 95.7 and 95.5 previously.  This is the highest reading since July.  The US consumer seems to be quite content at the moment with stocks near all time highs!  Stocks and US Dollar pair were unchanged upon the release.

However currently, DXY is trying to stage a late week rally, after an obnoxiously unchanged week.  On a 240-minute chart, the DXY appears to be making a charge above support and trying to retest the 50% retracement level from the highs on October 1st to the lows on October 18th, at 98.38.  If price pushes through there, the target of the inverted head and shoulders pattern and the 61.8% Fibonacci retracement level of the previously mentioned timeframe comes into place near 98.68.

Source:  Tradingview, City Index

As one may expect, as the US Dollar index is headed higher, the EUR/USD is pulling back.  The Euro makes up almost two-thirds of the DXY.  If EUR/USD can break trough some horizontal support at 1.1030, the 1.1000 is in sight, and so is a confluence of Fibonacci retracement levels near 1.0990 (as well as prior lows).  This should prove a tough support area to crack, however if it does, the target for the double top is near 1.0965.

Source:  Tradingview, City Index

One thing is certain though after watching the price action this week.  Volatility has been extremely low.  There needs to be a catalyst to really get these markets moving again. Whether it be Brexit or a US-China trade deal, something needs to happen in order to get the volatility back in the US Dollar currency pairs.


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.