March 05, 2019Market review and metrics for Forex, Oil, S&P500 & Yields.

Pivot points, Support, Resistance & Fibonacci Reversal levels; Chart of Interest – <USDCAD>. {updated 5PM EST }

FX Performance (Strongest to Weakest)
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Best Performer Worst Performer
  • Market performance (DAILY)

    Market Performance (click to enlarge)

Market Comments
Forex US Dollar was the strongest performing major again on the heels of better than expected economic data. ISM (February) posted a 59.7 -vs- market expectations of 57.3 while New Home Sales came in at +3.7%, shattering the -8.7% consensus. Digging deeper into the latter showed that there was a sizable downward revision for last months’ number but traders reacted to the headline figure and bought the US unit even as FOMC members continued to voice dovish sentiments. The magnitude of the moves was muted given the market moving events and data due out later in the week.
S&P500 Today’s trading in S&P500 following yesterdays’ sell off further validated the resistance zone between 2800-20. While a successful resolution to US-China trade dispute is being seen as the impetus needed that would embolden the market to breach this zone, repeated rejections lead one to suspect that the markets are not convinced that new highs are warranted especially given that valuations based on 2019 EPS estimates would only get stretched as price rises. China cut its’ growth target to 6-6.5%, down from 6.6 to 7.0% but did add more stimulus. This may turn out to be quite an important development as it is a tacit concession by a command driven economy that they are not too thrilled with domestic growth prospects. The global stock markets took notice as most traded in a tight range even as Chinese stocks surged, a potentially bearish sign.
Oil & Yields
US-China trade dispute! It’s beginning to feel as if the ongoing negotiations will be listed as a cause for everything. Imagine a meteorologist citing this as the reason for inclement weather!. This and the self-admitted economic slowdown by Chinese officials are being given as reasons for crude oil’s inability to rally further.

US 10Yr yields stagnant awaiting fresh clues about FOMC’s future activity..

  • Chart of Interest – USDCAD (Daily) Price action has been ranging within an ascending channel for the last year or so. If this formation is to continue then the pair should make its way to test the top of the range. Aside from the bounds of the channel that approximate dynamic support and resistance levels, key levels can be found at 1.3380 and 1.3060. Given the potential market moving event on tap for tomorrow (Bank of Canada Monetary policy decision) and Friday (Canadian unemployment), one can expect volatility of the kind that could propel the currency to either validate or violate the channel.

    (click to enlarge)

  • Pivot Points & Fibonacci Retracement Levels
    A technical analysis indicator used to try and determine the short-term trend of the market. The pivot point is the average of the high, low and closing prices from the previous trading period. If the market on the following period trades above the pivot point it is thought to be exhibiting bullish sentiment, whereas trading below the pivot point is seen as bearish. The Fibonacci retracement is the potential reversal of a financial instrument’s original move in price.

    Market Metrics (click to enlarge)