Financial Markets Daily

U.S. stocks were all but flat after Friday’s disappointing U.S. retail sales data and a fresh round of stimulus stalled, while the dollar fell for its longest losing week in a decade and spot gold closed down for its worst week since March.

In the currency market

Euro: The euro rose for the fourth day in a row to close 0.25% higher at $1.1841. On the technical daily chart, the firmly bullish 20-day average continues to lead the way, providing dynamic support and is now close to significant Fibonacci support. However, there are some unproven bearish differences in the technical indicators. The trend has been steadily declining at positive levels close to the 100-line mark. The RSI has retreated from its recent highs and is stable around 65. In the downward direction, the first relevant support level was 1.1710, this week’s low, followed by the July/August rally 38.2% retracement of 1.1635. If it falls below that level, the pair could be close to the 1.1500 level before buyers reappear. On the upside, the weekly high of 1.1863 is a direct drag, followed by this year’s high of 1.1915. Once above that level, the euro/dollar has room to rise to $1.2000.

Sterling: rose for the second day in a row to close at 1.3084, up 0.20%. Technically, the relative strength index on the daily chart is still hovering around 70 — moderately overbought. Momentum remained strong with sterling/DOLLAR trading above its 50, 100 and 200-day simple averages. In short, the outlook is not 100% bullish. Of immediate concern are 1.3060, the temporary upper limit in August, and 1.3145, the temporary peak before the outbreak. On the upside, the more important resistance is at 1.32, a high before the March crash. Further gains would see a move to January highs of 1.3270, followed by 1.3350 and 1.3510. On the downside, strong support at the August low of 1.2985. If it falls further, the next level to watch is 1.2870, which has been the support line since February. This is followed by 1.2815 and 1.2700 — the latter is where the 50-day moving average meets the 200-day moving average.

Yen: Usd/JPY turned lower, closing down 0.31% at 106.59. Technically, the relative strength index rose to 45.16 on Friday, slightly above where it opened this week and its highest level since July 22. Moving averages are above current levels with initial resistance at 107.40 and further resistance at 108.00. The dollar’s return to 106.00 against the yen reinforced the view that its ability to move further has been exhausted. In the downward direction, initial support is at 105.35 and further support is at 104.20. If it breaks below 103.00, it will fall to 103.00.

The stock market

On Friday (Aug. 14), traders digested mixed economic data and asked Congress for further clues from the Novel Coronavirus Stimulus Bill. On Wall Street, trading was light and little changed: the S&P 500 failed to break its February record, falling less than 0.1% to close at 3,372.85. The Nasdaq Composite index fell 0.21% to 11,019.3; The Dow Jones Industrial Average gained 34.3 points, or 0.12%, to close at 27,931.02.

London (Marketwatch) – European stocks fell on Friday as fears of a second coVID-19 outbreak prompted the U.K. to impose new quarantine measures. In Europe, the Stoxx 600 index closed down 4.46 points, or 1.20 percent, at 368.07. Travel and leisure stocks led the way, falling more than 2 per cent. Germany’s DAX index closed down 92.37 points, or 0.71 percent, at 12,901.34. Britain’s FTSE 100 index closed down 95.58 points, or 1.55%, at 6090.04. The CAC40 index in France closed down 79.45 points, or 1.58%, at 4,962.93. Spain’s IBEX35 index closed down 95.50 points, or 1.32%, at 7,155.00. Italy’s FTSE index closed down 229.20 points, or 1.13%, at 20028.11. In Europe, the Stoxx 50 index closed down 36.40 points, or 1.09 percent, at 3,306.45.

Commodity markets

Spot gold closed at $1,943.67 an ounce, down $9.35, or 0.48 percent, after falling $90.94, or 4.47 percent, on the week. On the day, spot gold hit as high as $1962.09 an ounce and as low as $1931.92, fluctuating by more than $30.

Gold futures in New York snapped a nine-week winning streak: COMEX gold for December delivery ended down nearly 1.1 percent at $1,949.80 an ounce, down about 3.9 percent for the week and down for the first weekly decline since June 5.

The International Energy Agency (IEA) and Opec each lowered their forecasts for global oil demand this year in their latest monthly reports. Oil prices closed lower on Friday. Brent crude for October delivery was down 16 cents, or 0.4%, at $44.96 a barrel. For the week, WTI crude rose 72 cents, or 1.7%, from 2.4%, the week before. Cloth oil rose 46 cents, or 1%.

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