Daily Market Review – 10/06/2016
Investors focused on FOMC meeting
The market is in a state of uncertainty with investors are awaiting the result of the Federal Open Market Committee (FOMC) meeting, which takes place on June 16-17. Major players are in stand-by mode at the moment, trying to see how the Fed acts in regards to interest rates.
The most likely scenario appears to be a kick-off of the cycle at the December FOMC meeting. Meanwhile, the number of the financial hawks who think it will happen in September meeting is constantly growing.
You should also take into account the IMF’s actively encouraging the Fed to begin tightening of monetary policy since 2016.
Trading during the Asian session was divergent. There is little chance of any strong movements in market taking place before the release of U.S statistics.
Resistance: 1.1345; 1.1380; 1.1450–1.1470; 1.1500.
Support: 1.1215–1.1210; 1.1050; 1.0915–1.0900; 1.0885; 1.0815–1.0800.
The Russian ruble continues to strengthen. The main reason for this is technical, i.e. the correction of the upward movement from May 19th. The pairing is acting out head and shoulders, a classic pattern from technical analysis (red on the chart). If prices plunge below the purple support line, it will allow the market to continue its downward movement to 54.00 or lower.
Resistance: 55.50; 57.05; 57.40–57.50; 60.00.
Support: 54.50; 52.00; 50.00.
S&P500 (Futures SP500 E-mini)
The US stock market is also unable to figure out the direction of the next major movement. It is very likely that the S&P500 will slowly start until the FOMC meeting next week. If it breaks through the resistance line around 2084.5, it could spread its downward movement to the 100-day moving average (colored in blue on the graph). The overall trend remains negative.
Resistance: 2086–2084.5; 2093; 2100; 2116; 2120–2122; 2133–2133.5.
Support: 2068; 2050; 2033; 2000.
Gold trading appears to have a positive dynamic today. This should be seen as a correction to the medium-term downward movement. If prices break the purple resistance line and consolidate above, they could continue corrective gains. If they break the green support line however, further declines are probable.
Resistance: 1186.00; 1187.00; 1193.39; 1196.00; 1200.00.
Support: 1175.00; 1170.00; 1163.00–1162.70; 1150.00; 1143.00; 1131.50.