Summary:
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Nasdaq (US100) struggles in the vicinity of the all-time high
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Despite stronger US dollar GOLD keeps trading in the consolidation range
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USDBRL waits for the Brazilian presidential elections
The US index composed of the technological stocks - US100 - has clearly underperformed other two major indices from Wall Street as of late. While the third quarter of the year was really good for the US equity market companies will now try to meet analysts’ expectations of earnings in the July-September period. First financial reports from the major US companies will be published next week therefore markets’ attention will be now mostly drawn to the earnings season. On the US100 chart we saw a candlestick with narrow body and long wicks yesterday what, given an unsuccessful attempt to break above the ATH, may be the first signal for bears. Taking a look at the US100 from the broader perspective one can see that the index is trading in the rising wedge pattern and the lower limit of this pattern coincides with the 50-period moving averages channel. Moreover, a potential divergence between MACD indicator (lower highs) and US100 price (higher highs) surfaced in the past couple of weeks.
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US100 bulls struggle in the vicinity of the all-time high. Source: xStation5
From the technical point of view, GOLD is another interesting market. The US dollar regained ground and began to strengthened following the latest FOMC meeting. The sell-off among precious metals started in April this year resulted mainly from the strengthening of the USD. However, the latest advance of the US currency did not translate into any major gold price movement so far. GOLD keeps moving in a tight consolidation ranging $1185-1215. Despite easing downward pressure since mid-September the precious metal still trades beneath 50-period moving averages channel. Moreover, the latest price movements could be viewed as a pullback towards the previously broken support level at $1215 per ounce, where lows from 2017 can be found. The question remains: whether the US dollar once again exerts pressure on the gold prices?
In case this year’s lows are broken the next support level to watch could be the $1130 handle where lows from the late-2016 are localized. Source: xStation5
The Brazilian presidential elections will be held this Sunday and the outcome of the vote may greatly influence both, Brazilian real and coffee prices. According to opinion polls the outcome of the first round will not be decisive. Jair Bolsonaro and Fernando Haddad are most likely to make it to the second round. Bolsonaro seems to be more market-friendly candidate but polls do not view him as a winner in case of clash with Haddad in the second round. Brazilian real underperformed severely against the US dollar this year with the USDBRL currency pair revisiting highs from 2015. In terms of USDBRL 3.94 handle should be viewed as an important level as local highs from June and July can be found there. Moreover, this level is additionally strengthened by the 23.6% Fibo level of the whole upward impulse started in 2017.
Vicinity of the 3.94 handle could be the first stop for USDBRL bears. Source: xStation5
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