Daily Market Report - Friday, Oct 21, 2022

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The British pound plummets to a fresh weekly low of 1.1122 on Friday after the release of disappointing UK retail sales data. The data showed the retail sales volumes fell by 1.4% in September, following August’s 1.7% fall. On a yearly basis, the decline in retail sales worsened to 6.9 percent in September from 5.6 percent in August.

The recent bearish momentum is also driven by the political crisis in Britain. British Prime Minister Liz Truss resigned Thursday after just 44 days in office. "I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative Party," said Truss.

EQUITIES

Wall Street ended lower on Tuesday following the release of mixed Q3 earnings results and the hawkish comments from Philadelphia Fed President Patrick Harker. “The Fed is actively trying to slow the economy,” and “we are going to keep raising rates for a while,” Harker said.

On the earnings front, Verizon and American Express are amongst those reporting the last quarter's financial results today.

OIL

Crude oil futures extend losses as bearish sentiment dominates due to the mounting fears of lower fuel demand from an expected global recession sparked by rising worldwide interest rates and as a surging U.S. dollar limits the ability of non-dollar consumers to purchase crude.

CURRENCIES

In the currency market, the US dollar Index has extended gains against a host of major currencies. The risk-linked currencies like the Australian and New Zealand dollar remain strong against the Euro and British pound. The USDCAD back to above 1.3800 on Friday morning. Moving ahead to the North American session, the CAD trades should closely monitor the release of Canada retail sales numbers.

GOLD

Gold price dips to the fresh monthly low of $1617 on Friday morning. The precious metal remains under pressure for this whole week due to the increased probability of the Federal Reserve raising interest rates by another 75 basis points (bps) in November. As of this writing, the metal slightly recovered back to above $1625.

Economic Outlook

On the data front, the Labor Department reported that initial jobless claims fell to 214,000 last week, the lowest level in three weeks and below analysts’ expectations of 230,000. On the other hand, the US existing home sales fell 1.5% month-over-month in September to 4.71 million units, the lowest level since September 2012.

Coronavirus update:

Worldwide, more than 624 million people have been confirmed infected and more than 6.51 million have died. The United States has confirmed over 96 million cases and has had more than 1.06 million deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD:
The currency pair extends its slide to a fresh session low of 0.9750. The next downside levels to watch are 0.9730/00. On the flip side, the immediate resistance at 0.9800 and 0.9850.



The important levels to watch for today: Support- 0.9730 and 0.9700 Resistance- 0.9800 and 0.9850.

GOLD: The gold price has reached a zone and a fresh demand for gold can be anticipated once the metal rises above the $1650 resistance. On the downside, the decline is more extensive, and it will be hard to rule out a run towards $1580 if the metal breaks below 1610.



The important levels to watch for today: Support- 1615 and 1610 Resistance- 1632 and 1640.

Quote of the day - I have found that when the market’s going down and you buy funds wisely, at some point in the future, you will be happy. You won’t get there by reading. Now is the time to buy. – Peter Lynch.

Read more - https://gulfbrokers.com/en/daily-market-report-567
 
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