DailyFX: Market Update: Tuesday, October 6, 2015

Equities temper their gains with the DAX trading lower by 1.2% from yesterday’s session high, and then recuperating these losses. German factory orders decline by -1.8% MoM vs. +0.5% expected. The FX markets remain sluggish with the exception of Japanese Yen which is slightly stronger on the soft equity markets. There is no major data on tap today with the exception of U.S. Trade Balance. It’s expected to show a deficit of -$47.10b.


Upcoming Risk Events (BST)

• 13:30: U.S. Trade Balance, est. -$47.10b.
• 13:30: Canada Int’l Merchandise Trade, est. -1.2b
• 15:00: Canada Ivey PMI, est. 54

• USDJPY flat, but with an underlying bearish trend as we are seeing profit taking in the equity markets
• EURUSD and GBPUSD remain choppy with no clear trend. EURUSD turns bearish on a break below the September low of 1.1085, while GBPUSD turns bearish below 1.5100.
• The Australian Dollar remains strong as the RBA keep their key rate unchanged and did not hint about potential rate cuts on the back of the current situation in China.

• We are seeing some profit taking in the DAX, FTSE 100 and SPX 500. This is of technical nature as the world’s equity markets have rallying strongly on the idea of the FED not hiking rates.
• The S&P 500 is now approaching the 2000 level with the September high at 2020. It would be fair to expect the S&P500 to slow down as we reach these levels. We expect the price to range trade in the 1870 – 2020 interval over the next few weeks.
• The FTSE 100 on the other hand is more bullish than other key indices, and might reach the July low of 6440 as long as it trades above the NFP low of 6049.

• U.S. oil is now trading closer to the upper end of the $43.30 – $47.70 range. A breakout above this high may trigger a rally to $47.67 and then the August high of $49.30.
• Gold remains stuck between the September low of $1098 and September high of $1155 At this moment it’s better to wait for further price action and then decide if any resulting breakout will be sustainable.

DailyFX, The Research Arm of FXCM Inc. (NYSE: FXCM)
London, UK

E-mail: azambrano@dailyfx.com
Twitter: @AlexFX00