Oh Dear China – Inter Market Analysis

  • China export decreasing while Import increasing – mixed findings
  • UK manufacturing lower and suggest Q4 slowdown (maybe saving for better Q1 numbers?)
  • Eyes on JOLT Jobs opening numbers today

Dollar Index

Daily

4 hour

As per our weekly report suggested, the dollar index is keen to build a V shape recovery again as we head to FOMC next week. Current price action suggest there are resistance here but a breach above will see a higher dollar index. Note how the daily dollar index is creating a lower high and lower low formation which could suggest that post FOMC is a sell on rallies?

Euro

Daily

4 hour

Euro is holding on to the gains made but a break below 1.078 will bring about fresh pressure to go lower to retest the breakout level. Otherwise, a break above 1.10 may need a confirmation that further buying could prevail to target 1.1139 levels.

German Bunds

Daily

4 hour

Bunds back to sky-high and hitting previous resistance again as noted on the daily chart. A 4th time charm or are we about to break higher from here? A break higher will certainly create a large daily divergence via the RSI which is worth noting on.

Dax

Daily

4 hour

Weeks of frontrunning and raising market expectation to the high of 11400, we saw how Dax fell out of bed with no QE expansion – falling short of expectation. Despite that, it is trying to find support and we cannot rule out that QE is still in place with Draghi keeping an Ace – until the market force him to show his hand (i.e. a tantrum to break below 10 k level).

Gold

Daily

4 hour

Gold had an impressive run as short covering went ahead post NFP data. A better than expected NFP failed to spur the dollar index higher – with no fresh buyers – there are only sellers. This logic applies across gold and silver as well – with no new sellers. Looking ahead, gold retraced and retested 50% of the move and a break below 1062 will not bode well. Otherwise, pre FOMC volatility could well instigate a potential breakout as the daily bollinger band is converging.

Silver

Daily

4 hour

The run higher has met with strong resistance here and similar setup like gold, the daily chart is shaping up for a potential breakout. The 4 hour chart looks to form a megaphone formation as well – thus we cannot rule out any retest or the making of a new low. As long as Silver is still trading above the 20 dma, we cannot rule out a retest higher but we felt that the trading range will be limited pre FOMC.

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