Gold to its Lowest level from three months after positive NFP
The dollar rose against a basket of major currencies and hit a seven-week high against the yen after the Bank of Japan increased its government bond buying, expanding monetary policy when other central banks are moving towards tightening. Despite Thursday’s massive DOE inventory draw, oil was unable to sustain gains and Brent dropped to $47.26.
In currencies, the important headline number was US jobs data UK Manufacturing and Industrial Production released Friday morning spotlight with the UK missing across the board. The concern is interesting, as the BoE has taken a more hawkish tone of late, leaving focus now on the BoE, if they will continue to indicate that the UK economy is ready for a 25bps move. The NFP was positive on Friday. EUR has continued to gain, optimism for EUR is clear with United Overseas Bank the latest to follow Deutsche and Morgan Stanley in taking EUR/USD long positions. The CAD recovery has slowed, largely due to the increased oil production out of the US, as 1.3202 behaves as the next key resistance level in USD/CAD.
In commodities, precious metals garnered much of the attention overnight — stemmed by a Silver flash crash, with many accounting this to a Fat Finger’, a mistake that is seemingly becoming more and more common. Silver fell from 16.140, printing a low of 14.328, however, a huge bounce was evident and the metal trades near pre-crash levels. The silver move weighed on the other precious metals, with Gold and Platinum seeing selling pressure off the back of the overnight fat finger. Oil has continued to reside near session lows through today’s trade, as increased output continues to overshadow the DoE report.
EURUSD – The EURUSD has been trading in its highest level at 1.1400 even after the NFP.
GBPUSD – The British data disappointed investors as the pound dropped lower following the bad factory data. The pair dropped below the 1.2900 level as it reaches a day low of 1.2867.
USDJPY – The Yen seems to be weakening even more after the BOJ announced more Bond buying and that basically eroded the currency valuation. It has risen to a day high of 114.18.
USDCAD – The CAD posted the third straight day of losses specifically after the DOE Crude Oil Inventories showed a drawdown of 6.3 Million barrels but gasoline demand seems to remain subdued causing the oil to drop and USDCAD to rise.
AUDUSD – The AUD seems to be between 0.7570 and 0.7630, but there is no news from the Australian economy nor the US economy to put that in perspective as the only explanation left would be technical movements.
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***Information contained in this news letter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making, but merely provides information from the market for its clients as additional information being made available as per the events occurring in the financial markets.
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