Daily Markets Broadcast 2018-10-26

Daily Markets Broadcast

2018-10-26

Wall Street rebounds after four days of losses

Wall Street rebounded strongly yesterday, helped in part by a firmer close for China shares amid a suspicion of official intervention. Strong earnings and positive outlooks from some tech heavyweights also helped. Today’s China open will likely determine sentiment in Asia today. Gold’s safe haven status dimmed as the US dollar regained upward momentum.

US30USD Daily Chart

Source: OANDA fxTrade

• The US30 index had its first up-day of the week yesterday as corporate earnings reports were more upbeat, predominantly from the tech sector
• The index is still below the 55-week moving average but has left trendline support from the February low around the 24,388 level intact
• US Q3 GDP data is due today and is expected to show a slower 3.3% annualized pace from Q2’s 4.2%. A stronger growth number would be positive for the index.

DE30EUR Weekly Chart

Source: OANDA fxTrade

• The Germany30 index posted the biggest one-day gain since June 14 as it rebounded from 22-month lows yesterday. Wall Street sentiment helped along with ECB’s Draghi saying the recent spate of softer data could still be transitory
• The index is still below the 200-week moving average at 11,479, but possible bullish divergence on the daily stochastics chart suggests a retest of the level may be possible
• GfK consumer confidence for November is due today and, like the IFO surveys yesterday, is expected to show a lower reading of 10.5 from 10.6 in October.

XAU/USD Daily Chart

Source: OANDA fxTrade

• Gold attempted a new weekly high yesterday, but failed as the US dollar index strengthened amid rising US yields and a stocks rebound reduced the desire for safe haven assets
• The metal has failed to overcome Fibonacci resistance at 1,239, which is 38.2% retracement of the April 11 to August 16 drop. Potential bearish divergence may be unfolding on the daily stochastics chart
• Sudan produced 78 tonnes of gold in the first 9 months of 2018, exceeding govt expectations by 12%

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