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Market Insight Commentary – 06 November 2017

06 Nov
forex

Market Insight Commentary – 06 November 2017

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President Trump has often used the stock market as a barometer for his own performance, and the US equity market has been relentlessly strong since he took the reigns as US President. I have a funny feeling that these statements will come back to haunt him in the coming months, the primary reason for this claim is that the jobs data on Friday painted a very odd picture. I am going to ignore the NFP data for now and instead focus on the hourly earnings which over the course of a year have fallen, which does not make sense given that the job growth and the company earnings are so strong. This earnings suggest that workers are essentially not feeling the benefit of this, and considering how Trump has always stated he is a President for the people – he is actually letting them down.

There was also some strange event risk that was reported over the weekend whereby we had numerous arrests were made in Saudi Arabia on the back of corruption charges, including numerous princes. Shortly afterwards there was a helicopter crash and it was confirmed that another Saudi prince was killed, is this all just an eerie coincidence, I am not entirely sure at this point. We also saw news filter though of a terror attack in Texas whereby over 25 people were gunned down in church, I would like to see how the market opens this morning before I take any large positions today.

The EURUSD will be a big pair to watch this week, the last 2 weeks has seen the EURUSD survive a break of a head and shoulders, the problem is that the low at 1.1600 has not been broken and remains intact. The 200 week MA is trading at around 1.1665 and that for me could be a big level to watch, if the bounce is able to extend higher than this level then price is bearish, but a close lower would be really bearish leading into year end.

The GBPUSD was a bit of a rollercoaster last week, it spent most of the week targeting higher levels as it was pricing in a possible rate hike, instead we got a more dovish BOE and this sent the pair tumbling lower. The recent lows trade at 1.3030 and that is where we closed the week, the 100 day MA trades at 1.3080 and this will be the key range to watch this week. If the bears break below 1.3030, then I will really start to fear for this pair.

Keep an eye out for what is happening on the geo political front today, Trump is Asia this week and North Korea are bound to “poke the dog with a stick.”

Market Insight Commentary – Forex

In the Zone

  • GBPUSD
  • AUDUSD
  • USDJPY

Market Insight Commentary – Indices

Important Economic Data out today

All Day                                      EUR                                             Eurogroup Meetings

Consensus:                             None

Effect:                                        More hawkish than expected is good for the EUR

Noteworthy News

  • I will be watching the news on Trumps visit in Asia this week, as there is bound to be some news filter through around the North Korea developments.