Short-term correction on most key trading instruments
06 April 2023
Wednesday saw a correction day on the markets, but without any significant moves. In the last few market commentaries, we were expecting this kind of movement. For example, on indices and gold, the bullish rally was really stretched and demanded some profit-taking action.
The most important data on the calendar was the Services PMI from various leading economies. It started promisingly, with better-than-expected data from Spain and Italy. However, after that, every single PMI was worse than forecasted. Fortunately, all of them still came above 50, which is the golden number dividing contraction and development.
Today's calendar is unusually empty for Thursday. The most important data will be the numbers from the job market in Canada and unemployment claims from the US. In Canada, we are expecting a rise in the unemployment rate from 5% to 5.1%, while in the US, we are expecting around 200K unemployment claims, which would be a slight rise from the 198K reported previously.
Indices are trading lower, experiencing a bearish correction after establishing new, long-term highs. The correction is flat and not volatile, indicating that demand controls the situation. We can also see a correction in the American Dollar, with EURUSD dropping yesterday and USDCAD rising, climbing above the long-term up trendline. We can also see a bullish bounce on the USDCHF and USDJPY.
Gold and Oil are also undergoing a correction. In the case of Gold, the support is at 2000 USD/oz, and we can assume that the price will drop there soon. As for Oil, we have a flat correction, and the bullish gap from Monday is still intact. However, the price does not want to climb higher either, so for me, the gap closing movement in the future is still more probable.