GER30 failed at the falling trendline resistance from the July high, and sentiment has turned sour as investors remain focused on the on-going trade war between the US and China, as well as other political risks. Hopes about further monetary policy easing by the ECB are keeping the index somewhat supported, but the charts suggest that pressure could increase in the near-term. A break below the 21 DMA could pave the way for another test of the key 12.140 support level, with the next significant area of support then seen between 12.000 and 12.025 points.
Poor economic data out of the Euro Zone and a less dovish than expected Federal Reserve are putting the Euro under increased pressure. EUR/USD traded with a 1.08 handle for the first time in over two years, and might test soon the 76.8 % Fibo of the 2017-2018 rally. A clear break below could pave the way for an extension of the downtrend towards the 1.05 support level.
Volatility in USOIL remains high, and following the sharp reversal in Mid-September, the short-term downtrend remains intact. The commodity broke through the rising trendline from the August low, and may test $50 support soon.
Gold dropped amid renewed USD strength, but that might be just temporarily, as the market slowly turn back to a risk-off sentiment and the number of political risks remain high. Key support is seen in the area between $1450 and $1455, and as long as that one is intact, Gold bulls still have the upper hand. To the topside, immediate resistance is noted $1500, followed by $1535.
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Two-year yields have covered their prior six-month range in the last week alone – and whether or not this move is sustainable matters a lot