Daily Market Review August 23



A decline in energy shares led most U.S. stocks in a downtrend, resulting in a quiet trading session on Monday. After having edged quite higher last week, U.S. stocks were then boosted by unexpected positive earnings reports by most companies and yesterday the S&P 500 and Dow Jones were both dropping. The Dow Jones Industrial Average and the S&P 500 fell equally by 0.1 percent, being highly sabotaged by swings in crude oil prices and energy shares slump in companies such as Marathon Oil.

Staying by the side of crude prices, investors should note that earlier today prices dipped by over 1 percent. Oil prices were jeopardized by shattered hopes that production freeze could have reinstated the current oversupply woes. Brent crude oil futures traded at $48.54 a barrel, down by 1.26 percent and this could eventually mean an end to August crude prices rally. Moving on, the EURUSD and the GBPUSD pairs are showing some signs of revival today, while the USDJPY currency pair moves back to the lows.

Investors keeping an eye on the US dollar, should note that currently the greenback is being dominated by other major currencies. However, Fed chairperson meeting on Friday could change the whole scenario and today the U.S. new home sales data is also awaited for release at 14:00 GMT. The USD could find some momentum here and rebound down from the support line. Also, in the Eurozone, data such as the German manufacturing PMI, Services PMI and manufacturing PMI are awaited. Thus, trade safely.

Technical Analysis:
The EURUSD pair held around 1.133 level earlier today, looking strong enough to break above 1.1370 level. Yesterday’s session shows that the pair initiated trading at the 1.129 level on a bearish note. After a few pullbacks, the pair gradually upped higher to the 1.132 level and consolidated before closing the session at the 1.131 level. With major economic indicators awaited by the side of the Eurozone today, this market could go buoyant. Data such as German manufacturing PMI, Eurozone’s services PMI and Manufacturing PMI are awaited. Keep an eye on this pair.

The USD dollar edged lower on the trading session today despite the weakness of the Japanese Yen. Yesterday, this pair was seen starting the session at the 100.5 level and hiked higher in the initial hours of trading. The pair reached up to the 100.8 level but was later hit by various pullbacks which dragged the pair down to the 100.2 level. Back in the lows, this pair may not be bullish and may cross below short-term support line of 100.1 and move again near 2013 lows. Currently, the Ichimoku cloud hovers above the candles suggesting a bearish session and a change is indicated for tomorrow. As for today, U.S. new home sales data will be available at 14:00 GMT.

Good news for investors watching the pair GBPUSD closely, this pair is moving slightly higher to the 1.316 level, as seen earlier today. A look at yesterday’s session depicts that the pair started trading at the 1.305 level and fell initially. However, later the pair found enough momentum to climb higher to the 1.311 level but fell again. The rise and fall of the pair shows the uncertainty revolving around trading on this pair. Towards the end of the session, the pair picked up a nice trend to close at the 1.313 level. The pair looks likely to move higher but scarce indicators from UK and weighing Brexit could affect this pair further.

 

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