European markets are lower amid NAFTA

Daily Analysis - 30/08/2018

Expectations of higher US interest rates drives Gold Down

The USD was defensive this past week. NAFTA negotiations diminishing the safe-haven asset demand and they wait to see improving risk sentiment. The Gold prices went down today amid the expectations of hawkish U.S. interest rates. A key psychological level was $1,202. That level actually acted as a very strong support. The Spot gold was down about 0.2% at $1,203.86 an ounce but then rose nearly 0.5 % in the last session. The U.S. gold futures were down 0.1 % at $1,209.92 an ounce.

Pound looks stable following EU offer of a post-Brexit plan

GBP held strong in Asian session today. After hitting its biggest gains in more than 6 months yesterday. The reason probably for the gains is the European Union's offer of a post-Brexit 'partnership'. The English pound went down as fears and uncertainty was the main theme for the past month that a possibility of a 'hard Brexit' was probable. Ease came after Michel Barnier gave the signal of an accommodative stance towards London in ongoing talks. Barnier said that the bloc was ready and prepared to offer the UK a good partnership pack though no "single market a la carte", which gave risk sentiment. Sterling went up about 0.09% to a one month high of $1.3040, and extended its gains after surging more than 1.2 percent overnight, its largest daily gain since Jan. 24. Yunosuke Ikeda, chief forex strategist at Nomura Securities said "The news is likely to have triggered short-covering by some traders who held sizable net short positions in the pound, assuming little progress was being made before the (Salzburg) EU summit on September 19-20,"

NASDAQ and S&P 500 reached all-time highs

The Nasdaq earned almost 1% to close at 8,109.70. The S&P 500 went up 0.6% to 2,914.05 and closed above 2,900 for the first time. The S&P 500 sector rose about 0.9 %. The Dow Jones Industrial Average went up 60.50 points to 26,124.60 while Apple stock rose more than 1.3 % to an all-time high. After Morgan Stanley raised their price target on the stock Amazon share rose about 3.4 % and predicted a $1.2 trillion valuation for the company. Analyst Brian Nowak said that the Amazon's advertising subscription but also the cloud businesses "will drive higher profitability and continued upward estimate revisions." Amazon's stock closed at $1,998.10. Shares of Google-parent Alphabet earned about 1.4 % after Morgan Stanley raised its price target on the stock. That makes the stock the highest on Wall Street.

AUD/USD sticks to disappointing data

The AUD/USD pair went below after the new selling pressure on today and is currently at weekly lows around the 0.7275 level. The pair was struggling to build on last night rebound and came across with some new supply to resume with this week's rebound from the 0.7350 supply level. The very disappointing domestic data that was released earlier during the Asian market session today, was one of the main factors that created a negative sentiment for the Australian Dollar and exerted fresh downward pressure for the third consecutive session.