Daily Market Review August 24



Gains in the mining and financial sectors pushed European stocks to trade higher on Tuesday. Bullish economic indicators also helped indices to edge higher while a close eye was kept on Stoxx Europe 600, which rose by 0.9 percent, displaying its biggest gain since August 5 this year. Among top stock performers, were BHP Billiton PLC rallying by 4.4 percent while Volkswagen was seen settling its disputes, brining correction to this market. However, positive data still came mixed casting doubts on further Eurozone developments.

The same saga was repeated on the Wall Street with indices inching up, but helped by different factors such as retailers, home builders and oil companies. Major U.S. stocks hovered around record levels resulting in a 0.1 percent rise for the Dow Jones Industrial Average and a 0.2 percent gain for the S&P 500. The US dollar is expected to rise slightly above its actual reading today, but investors still prefer to look for more cues from the Federal Reserve on Friday. Also, the existing home sales data is expected at 14:00 GMT today, which could be bullish.

Another important data awaited in the U.S. today is the crude oil inventories data. Crude oil prices dipped on the Asian trade again earlier today, casting doubts on any rise above $50 in the near future. Crude prices are believed to remain tumultuous within the $40 and $50 range for the rest of this year. However, a draw in crude inventories today could help prices to soar higher today, but given the current oversupply issues, prices could fall. Therefore, trade safer as a streak of opportunities

Technical Analysis:
The Euro slumped against the US dollar despite economic indicators in the Eurozone were satisfying enough. The session for the pair EURUSD commenced at the 1.131 level yesterday and in the early hours of trading, the pair upped slightly higher to the 1.134 level. The pair looked good to go above the short-term resistance line of 1.135 level but later retracted from gains, due to various pullbacks. As the European stock market soar higher, the Euro was undermined. The session closed at the 1.130 level, while earlier today the RSI indicator showed that the pair might be moving to an oversold market, keep an eye here.

The pair USDJPY tried to edge higher earlier today and was seen moving towards the 100.5 level. If the pair does cross above this level, it could go higher. Markets mostly await Fed chairperson speech on Friday before taking any concrete action here, which explains the weakness of the USD. Yesterday, the pair commenced the session around the 100.2 level on a bearish note and a traded in a consolidated mode. After several pullbacks and momentary jumps, the session closed at the 100.2 level. Currently, the pair moves within the Ichimoku cloud and could consolidate, but as candles will move above the cloud, the pair could turn bullish. Therefore, keep an eye on this pair.

A bullish momentum was noted for the GBPUSD pair yesterday as it hiked upwards on the trading chart. After initiating the session at the 1.313 level, the pair slowly moved up with the help of various momentary jumps and reached to the 1.318 level. After gaining higher grounds, the pair consolidated for a short while and later climbed higher to attain the 1.3206 level. The session was brought to a halt around the same vicinity and currently the pair hovers near the 1.317 level. However, a small change from yesterday’s session is that the pair is currently in a bearish territory, thus verify the trends of this pair today.

 

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