Daily Market Review August 19



Gold prices slumped on the Asian trade earlier today as the debate for a hike in rates by the Federal Reserve grew. Commodity traders reacted to the FOMC minutes of meeting which signaled that the Fed could raise short-term interest rates before the end of this year. On the Comex division of the New York Mercantile Exchange, gold prices slipped by 0.28 percent to trade at $1,353.45 a troy ounce. Major central banks around the world might opt for low interest rates which may continue to affect commodity prices.

Elsewhere, the dollar fell to its deepest nadir since June 23 but has somehow managed to up slightly higher yesterday. The dollar is around eight-week lows against the Euro and displayed a three-week lows against the Yen. The dollar index stood at 94.34 earlier today, rising by merely 0.2 percent but incurred a weekly loss of 1.4 percent against a basket of major currencies. The focus of the market now shifts to the speech by Fed chairperson Janet Yellen, awaited next week.

Crude oil prices are continuously dipping lower and the same trend has been seen in the past weeks. On the Asian trade earlier today, Brent crude prices slightly slumped but still trying to remain near two-month highs encouraging a bull-run, by keeping close to the $50 trading range. After June 24, it was only yesterday that Brent crude prices were lifted above $50 a barrel, however uncertainty that prices could remain above still hover on the markets. Keep a close eye on crude prices while trading.

Technical Analysis:
The US dollar being weak, the Euro managed to cap on gains and remain in the territory of $1.1338. The USD slumped against the Euro, depicting eight-week lows and this trend will continue as markets remain confused over the Federal Reserve move to raise interest rates. Yesterday, the pair EURUSD trading session commenced around the 1.129 level and rose to the 1.1325 level with the help of some momentary jumps. Some pullbacks tried to drag the pair down later on, but the pair was again sent higher 1.136 level and the session closed around the same vicinity. Currently, the pair revolves around the 1.133 level, looking bullish on a short-term basis, therefore trade safely here.

Lack of fundamentals could eventually drag the USDJPY pair down again today but luckily the pair shrugged previous losses and moves slightly away from the 99.8 Yen. The dollar being currently at its worst fall, the slight rise for this pair earlier today consoled many traders. However, economic indicators are not going to help this pair any further today as there is not much happening by the side of the U.S. today. Yesterday, the pair was seen starting the session around the 99.8 level and initially fell to the 99.7 level. Later, the pair grabbed some gains and upped to the 100.4 level, but ahead of the FOMC meeting minutes, the pair was dragged to the 99.8 level again. This pair might remain bearish, thus keep an eye.

Positive economic indicators from UK continued to fuel the GBPUSD pair and earlier today this pair was seen higher at 1.314 level. On a weekly basis, the pair GBPUSD moves away from the 1.288 level and gained momentum to reach near the resistance line of 1.318 level. A look at yesterday’s session shows that the pair initiated the session at the 1.304 level and slightly edged higher in the first few hours of trading. Later on, after a few little pullbacks, the pair upped higher to the 1.316 level with the help of a superb momentary jump. UK job figures being positive, helped the pair to eventually climb higher but was also aided by the weakness of the dollar. The pair looks likely to remain bullish on a short-term basis, therefore keep an eye here.

 

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