Friday the 13th. For the superstitious among you, a day to be avoided on the trading front. And after Thursday’s volatility caused by the ECB rate announcement, it felt like an early start to the weekend for many.

The Asian and European sessions saw some USD weakness as EUR rallied to 1.1109 and GBPUSD to 1.2476. USDJPY has slipped back below 108.00.

For GBP, there appears to be some optimism towards a Brexit deal as Boris Johnson prepares for meetings with EU officials on Monday. Crypto remains quiet, consolidating on yesterday’s gains with BTC at $10,300 and ETH at $179.

Friday’s US session would focus mainly on US Retail Sales data. The headline number rose more than expected, up 0.4% against 0.2%. There was also an upward revision to last month’s number. The reaction was to see the USD claw back some earlier losses with EURUSD slipping to 1.1070 and GBPUSD back to 1.2430.

USDJPY goes the other way, up to 108.12. Equities open higher with the DJ initially up 60 points. XAU has slipped back down to $1,495. The final piece of data shows Michigan Consumer Expectations increased marginally but has a negligible effect on the markets.

And for FX and equities, that’s as exciting as Friday got. The big moves came in the bond markets with the US 10Y yield jumping to 1.9%. This, in turn, saw XAU drop to $1,486.

Stocks end the day mixed with the DJ once again in positive territory but the S&P and Nasdaq both marginally in the red. The weekend would bring development in the Oil market with Saudi Arabia’s largest oil processing facility being hit by drone attacks. This could put upward pressure on the price of Oil on Monday.

And for crypto, a mixed weekend with BTC stuck around the $10,300 but ETH jumping as high as $190.85 at one point.

The correction in the bond markets has seen a pullback for XAUUSD as US rates rally. Looking at an hourly chart we have 2 significant support levels ahead. The first and rather more short term is $1,484.

The second and somewhat stronger is $1,480. Below there would potentially open up the downside the next support levels coming in ahead of $1,450. Keep an eye on what has been a very popular trade over the past couple of months, especially if the markets blow off the risk of recession and the US bond markets correct further.

David Hannigan
Author

A graduate of the Cass Business School, Dave's career began with Credit Suisse as an Equity Options Trader on the London Stock Exchange, before moving into the world of FX with Chemical Bank and Citibank. 1994 saw him join National Australia Bank, first as a Senior Dealer, then Senior Vice President and Chief Dealer.

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