Markets Stay Range Bound

The Dow Jones Industrial Average slid -0.08% yesterday closing at 16272 while the S&P 500 and the Nasdaq Composite were modestly higher with gains of 0.20% and 0.15% respectively. The S&P 500 futures for December delivery are currently trading at 1915, below the main resistance between 1945 and 1950. The doji reversal pattern that emerged three sessions ago has so far managed to see prices close bullish for two consecutive days, adding to the upside bias. There is a risk of a possible dip in the near-term, especially if payrolls raise expectations of a rate hike, but the bias remains sideways until the resistance at 1980 is broken or key support at 1870 gives way. Needless to say, the US equity markets aptly capture the uncertainty of the rate hikes and today's NFP report could possibly help in setting a short-term bias in the markets.

The Aussie dollar was supported today with the retail sales numbers rising a healthy 0.40%, up from -0.10% decline last month. The Australian dollar remains strong, posting nearly a three-day rally after the currency fell to lows of 0.6950 earlier. The doji candlestick pattern at these lows, alongside the bullish consecutive closes, could possibly open the way for a further rally with the main resistance coming in at 0.7112. In early trading today, the Aussie was up 0.12% against the Greenback. The Aussie remains supported as expectations for the RBA keeping monetary policy unchanged at this month’s meeting remains high. The commodity risk currency managed to hold ground yesterday after a steep drop in commodities following the weak US ISM manufacturing figure for September. The soft ISM print highlights the weakness in the manufacturing sector and could possibly sour the NFP job number due later.