The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Risk is already on the back foot with AUD/USD finally losing its grip on the 0.9300 handle for the first time since June. This will rattle confidence for the bulls quite significantly with the next support all the way down in the 0.9200 region, where the 200-day moving average comes in. On the calendar today we have China activity reports with the official manufacturing PMI and HSBC manufacturing PMI reading for July due out. The market is expecting to see further signs of improvement in both readings. Should we get some positive readings then traders will have to balance the negative risk sentiment and positive China data. This has potential to cause some volatility for the pair. Perhaps selling a recovery into previous support at 0.932 will be the preferred strategy in the near term.
This was the only pair that remained unscathed from all the volatility and managed to hold its ground around 102.80. However there is a bit of activity on both sides of the equation today which could result in some volatility for the pair. Japan’s final manufacturing PMI is released today and BoJ Governor Kuroda speaks later in the day. In the US, we have non-farm payrolls where the market is expecting another strong reading. Should this be the case, we could see USD/JPY retest 103 in the near term.
After finally pulling back from record levels, everyone is talking about whether this is the beginning of a significant correction for the S&P. There is an uptrend that has been in place since November 2012 that comes in at around 1920. The 1923 level is also the 38.2% retracement of the recent rally. The question now will be if traders have enough conviction to buy a pullback into support and keep the run going. Jobs numbers later today will go a long way towards influencing sentiment and could be pivotal to whether we hold this support in the near term. Economists expecting 230,000 jobs (range 310,000 to 160,000). Keep an eye on the US unemployment number and average hourly earnings though as earnings tend to be a good feed for inflation.
The healthcare stock has been travelling well recently but faces a real test today after its Q4 earnings missed estimates. RMD had been gently trending higher recently and managed to push through resistance at $5.50. However this could all come undone today after its US listing lost ground on the back of the earnings. The next key level of support is at $5.25.