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After failing once again at a Fibonacci price level at 1.3318, despite a weaker-than-expected U.S. retail sales report, the EUR/USD traded lower on Friday. The inability to breakout to the upside following the weak report suggests investors are a little nervous about taking a position ahead of next week’s U.S. Federal Reserve Monetary Policy Committee meeting.
Unlike the Euro, the British Pound continued to post gains against the U.S. Dollar. The weak retail sales number suggests a sluggish economy for the U.S. in the third quarter. This comes at a time when the U.K. economy is showing signs of strengthening enough to warrant a change in Bank of England’s monetary policy. Currently, investors are buying the GBP/USD because they feel the growing economy may force the BoE to hike interest rates sooner than expected.
Despite the weaker U.S. Dollar, long liquidation continues to pressure December gold. With the uncertainty lifted regarding Fed tapering, the dampening of the military threat against Syria by the U.S. and relatively low inflation, speculators cannot find a reason to hold on to gold. This selling pressure should continue until the market reaches a value area, or if peace talks breakdown between the U.S., Russia and Syria.
November crude oil finished the session lower, but speculators continue to support the market while they wait out the results of the negotiations between Syria, Russia and the U.S. Speculators are still holding on to hopes that there will be military action against Syria because of its use of chemical weapons. Until there is an agreement in place, it looks as if the specs are willing support the market at this time.
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