Will The Dow's Uptrend Hold? A Glimpse into Friday's Markets
08 September 2023
Good day traders! We'll begin by shedding some light on the data released on Thursday. We had the unemployment claims, which came in better than anticipated at 216,000, a pleasant deviation from the 232,000 expected. Such numbers have reignited concerns regarding potential interest rate hikes from the Fed in November. From our northern neighbor, Canada, the Ivey PMI was a breath of fresh air at 53.5, especially when the expectations hovered below the 50 mark.
Looking ahead to today, Friday promises to be significant as well with job data emanating from Canada. Market participants are keenly eyeing the employment change, projected at 18,900, and a slight uptick in the unemployment rate from 5.5% to 5.6%. While it may seem like a quiet day in the economic calendar, it's worth noting that Saturday will see the release of inflation data from China, expected at 0.2%.
Onto the forex market, the situation is rapidly unfolding. The EURUSD achieved new monthly lows on Thursday, dipping to levels last witnessed on the 8th of June. From this, one can glean the prevailing strength of the USD. Case in point, USDCAD reached new local highs, marking its strongest position since the end of March.
In the world of indices, it appears the week's corrective trend persists. The S&P 500 chalked up its fourth consecutive bearish day, following two shooting star patterns identified late August and early September. Meanwhile, the Dow Jones is clinging onto its long-term uptrend line, and as long as it stays put, a buy signal looms. Over in the tech space, the NASDAQ exhibited potential for a V-shaped reversal on Thursday. As for European markets, the DAX remains bearish, stationed below the neckline of a head and shoulders pattern with eyes set on the 15,500-point support level.
Commodity traders should brace themselves for a roller-coaster ride. Precious metals, especially gold and silver, lean towards a bullish correction, albeit the overarching sentiment is somber. Contrarily, oil showcases signs of a short-term bearish correction but retains its bullish long-term stance. Notably, WTI oil is veering towards the $83 mark, aiming to cement this level post the bullish breakout, while Brent eyes the $88 mark, post its early September resistance breakout.