The Market is Roiling

The political tensions over North Korea remain high. At a meeting of the heads of South Korea and Russia, Moon Jae-in called on Putin to cooperate in oil deliveries to North Korea, but, understandably, Russia will hardly sacrifice its interests for the sake of exerting additional pressure on its partner. Furthermore, the head of Japan’s ruling party stated its readiness to reconsider its agreements with the United States on locating atomic weapons in his country, although it plans to keep its nuclear program scaled down.
On top of everything else, hurricane Irma is completing today’s picture: it is threatening to become the most powerful hurricane in the United States. Appearing fewer than 2 weeks after Harvey, Irma is threatening primarily Florida and the Caribbean.
Commodities reacted immediately. Gold futures tested $1349.70 per troy ounce, almost getting to $1350. Brent broke through $54. The May level of $54.50 may be an obstacle to further movement. But, if growth continues, the likely target will be $56, where the resistance of a rising price channel is located.
The bulls clearly lack the nerve to attack the 1.2000 level for the EUR/USD pair. This wait-and-see attitude is related both to politics and to the ECB’s Thursday meeting. Obviously, it is not so much Draghi’s decision as his comments that will be of interest. At the same time as the European Central Bank’s press conference starts, data on initial US jobless claims come out. Amid the negative NFP data, the consensus forecast is 245,000, which is 9,000 higher than the previous week. We believe that the dollar might be under pressure tomorrow. If the pair continues to rise, the target of course will be 1.2000. For now, the support is at 1.1920.
Meanwhile, Canadian monetary authorities pulled a surprise by raising the interest rate 25 basis points, i.e., to 1%. Poloz’s decision is related to an attempt to maintain a balance between more than a decade’s strong growth and low inflation. Moreover, one must naturally consider that the Bank of Canada (ВОС) is watching the Fed FOMC’s actions and does not want to stray far from its neighbor’s policies. Analysis of the futures market indicates that traders are expecting a threefold increase in the BOC’s rate before the end of next year. Naturally, Poloz’s decision caused the loonie to drop by more than 200 points. According to wave theory, the USD/CAD pair may be in a final C correction wave on the daily charts. The bears are clearly winning for now. If a breakthrough at 1.2250 is confirmed, the next target may be 1.2100.

Olymp Trade Review