Us equities rallied late in the session to close mixed, a welcomed relief for traders who began to panic after Tuesdays biggest daily drop year to date. However, equities managed only a light bump higher and will remain sensitive to selling pressures, should they dip below yesterday’s lows. The DJIA was the day’s biggest loser, sliding 0.03% while the S&P 500 gained 0.19% and the NASDAQ 100 finished higher by 0.66%.
In FX, we have seen the USD Index recover from its earlier losses as the USDJPY gave back over 75 pips to recover from its 110.75 lows as the other majors found resistance. The EURUSD continues to be constrained by the 1.0800 level while the GBPUSD is held at the 1.2500 level. Commodity currencies have turned bearish and we are seeing some pressure on the AUD and CAD.
In commodities, crude oil experienced another spike lower after US Crude inventories came in much higher than expected but the downward run was short lived as bulls managed to reverse the tide and trade higher, testing the $48 resistance level. Gold traded between the 1245 and 1250 level with no real direction. However, bears managed to put in a lower low, setting up a potential bearish head and shoulder. Commodities will remain sensitive to global sentiment, with an increase in confidence, likely to see gold fall as crude rises and vice versa should we see a souring of sentiment.
Today gives USD bulls another chance at holding the 100 level on the USD index and perhaps making a move higher should the US Unemployment Claims figure beat expectations or if Fed Chair Yellen strikes a hawkish tone in her speech. Alternatively, a worse than expected release and/or a more dovish Yellen will see the USD fall further as bears turn the 100 level into key resistance.