Tue. Oct 26th, 2021

key data release

EURUSD falls in Fed Fed minutes

EURUSD

The U.S. dollar rose to nine-month highs after the reduced talk hit headlines once again. The Fed’s minutes of the July meeting hinted at a potential cut in its bond-buying program later this year.

Despite the separation of the timing of shifting, there is an apparent consensus that the economic recovery is pushing towards the turning point.

This gives the next job reports all the importance, as the constant improvement would pressure the central bank to pull the trigger.

The euro is heading towards the November low 1.1600, and a default could accelerate the sale to 1.1400. 1.1800 it is the immediate resistance.

AUDUSD weakens as the taper becomes uncertain

AUDUSD

The Australian dollar collapsed as the sense of risk hit.

After RBNZ gave up its rate hike this month due to new Covid infections in the country for the first time since February, traders have become suspicious of the contagion to its Australian counterpart.

Closures in Sydney, Melbourne and Canberra see no sign of release amid new cases and economists expect this to affect employment and wage growth. The RBA could also have to back down from market prices already forecast in the 2023 rise schedule.

A break below 0.7000 it can lead to an extended sale towards 0.6600. 0.7400 it remains a key hurdle ahead.

The SPX 500 drops as recovery moderates

SPX500

Global stock markets are shrinking in the face of growing concerns about the recovery. The Fed’s inclination toward tighter monetary policy could be an excuse to reap profits at high valuations.

What really drives the market is the uncertainty surrounding growth. The fear of inflation has become the fear of slowing down. All investors wonder when the music would stop and the last thing they want to see is a premature end of QE that could derail the recovery.

The S&P 500 has met resistance just below 4500 and struggles to maintain the 30-day moving average. 4250 it would be a key support in case of a deeper correction.

UKOIL falls under demand problems

UKOIL

Crude Brent took a nose in the middle of a bleak prospect of fuel demand. Growing cases of the covid-19 delta variant have once again shut down major economies.

There is a growing concern that Europe and the US may suffer the same fate, which would slow the global economic recovery. The travel industry remains the weakest link in the fragile balance between supply and demand.

As the holiday season draws to a close, oil consumption may have peaked as inventories continue to rise. The imbalance pushes the price down to the May low 64.60, a break would extend the sale to 60. 71.70 it is the first obstacle in case of rebound.

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