Asian shares slumped for the fifth trading session in a row, stumbling to three-week lows after an unexpected decline in Chinese exports raised fresh concerns about the health of the world’s second biggest economy. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1% to the lowest since mid-September. Other Asian stock indices such as Hong Kong’s Hang Seng index, and the Japanese Nikkei 225 also fell today.
According to the General Administration Customs – China, the country’s exports diminished by 10% in September from a year earlier while imports also witnessed a decline of 1.9% after a pickup in August. Worse-than-expected data left China with a trade surplus of $41.99 billion for the month – a level that missed the forecast for a surplus of $53.1 billion.
Minutes of the U.S. central bank’s September meeting, released on Wednesday reinforced the case for tighter monetary policy before the end of the year.
Against the background of weak Chinese reports suggesting tepid domestic and foreign demand, increasing expectations of a U.S. interest-rate hike and uncertainties spurred by Britain’s efforts to leave the European Union, the Japanese Yen has been rising in a knee-jerk reaction. A fall in equities gave a lift to the yen – one of the safe haven currencies which investors seek in times of market stress.
Oil extended losses following the report by the American Petroleum Institute that U.S. crude inventories rose by 2.7 million barrels to 470.9 million barrels in the week to Oct. 7. This would be the first rise in oil stocks following five straight weeks of declines. The U.S. Energy Information Administration (EIA) is due to publish official inventory data later on Thursday.
The Aussie is following a steady downtrend that has pushed AUDUSD to break below the 38.2% retracement level at 0.75255. The currency pair pulled back yesterday after encountering the resistance zone between two moving averages. These two MAs are expected to cast downward pressure on the pair for the near future and may send AUDUSD to as low as the 50.0% level.
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NZDUSD dropped below the 38.2% level on Monday and continues to head southwards through this week. After some correction yesterday, the Kiwi resumed the down moves today and is anticipated to find support at around 0.69600. The RSI index has neared the oversold zone and the ADX has soared as high as 51.83. Therefore after hitting this level, a pullback could come about.
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As can be seen from the chart, EURJPY has re-entered the trading range between a lower boundary at 114.000 and the upper boundary at 116.000, where it had been trapped from late-August to mid-September. The pair is heading towards the support at 114.000 and may break through this level as the bearish signals are quite strong. The two MAs are very likely to converge and are placed above the price action, the RSI index is pointing downwards, and there is wide divergence between the %K line and the %D line in the stochastic charts. All of this combines to suggest a powerful downtrend.
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As can be observed from the hourly chart, the gold market has received a signal suggesting a reversal into an up-move as the 20-period MA has penetrated the 50-period MA from below. With the RSI indicator surging above the 50 line yesterday and heading upwards to the overbought zone, the yellow metal can soar as high as 1265.00.
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Sugar had to give up its strength after coming up against a couple of moving averages which are placed above the price action. The sugar market has been floating in bearish territory, as indicated by the RSI index that has inched down to as low as 44.36. The support at 22.50 can be where we take profit.
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The NASDAQ 100 index created a gap down at the market open on Wednesday. The index has fallen back into the trading range between 4840.00 and 4750.00 and might pay a visit to the lower boundary at 4750.00 as the short-term MA20 has crossed over the long-term MA50 from above, indicating bears overshadowing the market.
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