7th December 2017 - The risk appetite could find its way back to the markets

Walid Salah Eldin

Active member
214 1
The market sentiment improved during the Asian session sending the future rates of the US major stocks indexes up, after the selling pressure on the US Equities abated during the US session.
As the trust in the US economic performance is still holding and the US labor market is still sending positive signs to help the investors to get rid of the their concerns about the political situation.

While The investigation about the connections between Trump’s campaign and Russia in the 2016 U.S. election remains a threat and US is still facing new partial government shutdown on Dec. 8 if Congress can’t reach an agreement on new spending bill by tomorrow.
These worries could spur a profit taken wave in the US Equities market following the very tight Senate passage of the corporate tax-cut legislation.
UST 10yr yield is now stable near 2.34%, after dipping to 2.31% area and also USDJPY could creep up for trading now near 112.40, after footing on 112 level.

The sterling is still depressed by May's failing efforts to have applicable Brexit Agreement during her meeting with EU commission president Junker this week and she is looking now for new acceptable text on UK border with Northern Ireland for passing a deal with EU.
GBPUSD found difficulty to go back for trading above 1.34 level ahead of the release of this awaiting text, After The DUP had said That There is still plenty of work to be done for solving the Irish border question.
Now, EU is waiting for UK answers about this border treatment by the end of the week and May seems seeking for delaying this issue for a later time in the Brexit talking to not be forced to present new submissions.

The Aussie is still depressed by the disappointing GDP expansion in the third quarter in Australia by only 0.6% (qoq) , while the median forecast was referring to 0.7% quarterly expansion following growth by 0.8% has been revised up to 0.9% in the second quarter.
RBA kept the interest rate unchanged last Tuesday at 1.50% depressing the odds of hiking rates by keeping its worrying phase about the negative impact of AUD appreciation on both of the economic activity and the inflation outlook.

AUDUSD is trading now at 0.7550 after peaking at 0.7653 last Tuesday.
The loonie has been hit by BOC cautious tone in its released economic assessment following its decision to keep the interest rate unchanged at 1% yesterday, after raising it twice this year by 0.25%.
The loonie has been already undermined by the oil prices retreating this week and USDCAD is trading near 1.28 currently after forming a higher low at 1.2623 last Tuesday drove it back above its daily SMA50.

The oil prices have been exposed to selling off coincident with the equities correction this week but They are still underpinned by expected IEA US crude oil Stocks slide amid OPEC and non-OPEC oil cut extension to the end of next year.

The gold is still unchanged trading near $1265 per ounce, after Trump's recognizing of Jerusalem as Israeli Capital clearing about the preparation for transferring US embassy to it.
This declaration will be discussed in new meeting of the UN security council later this week, after it had been denied by all leaders in the Middle East and also by Germany and France.

GBPUSD has been exposed to selling pressure drove it down for trading now near 1.3380, After forming a lower high at 1.3550 below its formed peak on last Sep. 20 at 1.3656.
The cable is now trading in its third day of being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.3538, after forming a second top at 1.3550
However the Cable is still underpinned by continued trading above its daily SMA50, its daily SMA100 and also its daily SMA200.
GBPUSD daily RSI-14 is now referring to lower existence inside the neutral region reading 55.945.
GBPUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line in the neutral area at 26.409 leading to the downside its signal line which is in the same area reading 46.923.

Important levels: Daily SMA50 @ 1.3249, Daily SMA100 @ 1.3112 and Daily SMA200 @ 1.2874
S1: 1.3378
S2: 1.3026
S3: 1.2775
R1: 1.3550
R2: 1.3656
R3: 1.4000

Have a good day

Kind Regards
Global Market Strategist of FX-Recommends
Walid Salah El Din


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