Global Markets Push To Record Highs

by Phil Moore August 7, 2014

Stocks markets around the globe pushed sharply higher last week. This round of fresh gains pushed many Indices to, or near to all-time highs. The dollar proved the greatest loser in this ‘risk on environment’ grinding lower for 10 consecutive trading days to finish at multi month lows.

It is widely expected that this current trend will continue with the Euro, Yen and British Pound all setting up to break into new trading ranges against the beleaguered dollar.

In what is a generally quieter week for Dollar news, attention will be firmly focused on two key events this week that could drive direction. The FOMC meeting minutes on Wednesday and Thursdays Consumer Price Index Inflation figures are not expected to hold any surprises and should lead to predictable moves.

Elsewhere the Australian Monetary Policy Meeting Minutes and BOJ Press Conference kick off the week. Focus switches to the British Pound mid-week with minutes from the Monetary Policy Committee proving of note. Retail figures and Monthly CPI figures will prove of interest for Canadian dollar traders at the end of the week.

In commodity markets Gold broke higher last week. Gains for the Yellow metal looks likely to continue, with the further gains expected this coming week as demand from Chinese buyers continues. Similarly the recent interest and rally in Crude looks likely to continue with a base to the price now having formed at $100 per barrel.

Key News This Week

Forex

EUR/USD – The pair moved strongly higher over the week with 1.3745 looking the next level of interest. A test of last Decembers high at 1.3892 is less likely however with the bigger picture bias for the pair pointing south.

USD/JPY – Looking to have found support above 101.63, USD/JPY looks to have formed an important bottom. While immediate price action could be volatile, we would expect a gradually move higher. Look above 102.85 to confirm.

USD/CHF – Holding above 0.8902 the USD/CHF has given up recent gains and is testing lower support again. The pair continues to remain above the falling trend line and grinds lower. Below 0.8902, 0.8846 becomes the next area of interest.

GBP/USD – Cable continued to show strength with the pair accelerating higher to 1.67458. This is the highest level since May 2011. With support at 1.66 the next level of interest is the 2009 high of 1.7042. Look higher this week.

Major Indices

DOW – The market continued to rally from the lows set last week. Breaking back above the 16150 level the market continues to look bullish. 16200 looks to offer near term resistance. A break here targets towards 16600 highs again.

NASDAQ – In line with the DOW, the technology focused NASDAQ rallied strongly over the week to end near all-time highs. At 4243 the Index looks set to move to new highs this coming week. 4200 provides near term support.

FTSE – Pulling back from the highs recorded for the week, the Index closed ended at 6663. Closing above 6600 offers a bullish tone that is likely to see the Index retest the 6900 level. Look higher over the week.

Commodities

Oil – Price pushed above the $100 per barrel mark though failed to hold onto highs. Ending the week at $100.32 per barrel, the market looks constructive although it will need to break and close above the $101.00 level to confirm the bullish case.

Gold – Finally we saw the move in Gold this week which adds credibility to the bullish case that a longer term low has been formed. Price powered to $1320 and the weekly trading signals look good following a close above the 200 day Moving Average. $1350 offers the next level of resistance.