Shanghai Composite ventures into the green as gold appreciates

Global Market: Concerns involving the extended decline in commodity prices and weakness experienced within the emerging markets have enacted punishment upon the inflation and growth outlook for Europe. However, these concerns did not provide a compelling case for the ECB to immediately enforce further stimulus measures as a tool to promote domestic stability. ECB’s Draghi acted with prudence, informing the market participants that it was too early to decide on further stimulus measures, and as a result of this decision the EUR managed to advance against the Dollar and other leading currencies on Wednesday.

Following the contractionary China Caixin manufacturing PMI release on Wednesday, the Shanghai Composite Index has meandered back into green territory trading +0.33%. The ASX200 follows the same pattern currently trading in the green whilst other Asian equities such as the Hang Seng and Nikkei255 have shown some negative gains as of writing. The soft China flash PMI will add to the batch of data releases from China which continue to weigh on investor concerns about the developments within its economy, with the likelihood of the PBoC continuing its easing cycle as a tool to promote economic stability.

Wall Street succumbed to the wave of jitters from the soft China data as the American equities closed negatively in yesterday’s trading session. With the Fed stating that the next rate hike in the US will be based around global developments, the prior concerns market participants held in regards to the developments in China and emerging market weakness, continue to expose the USD to more pressure. Dollar vulnerability has translated to the Gold bulls regaining momentum with the next relevant resistance based at 1145.0 still in play.

The focus today in the European Session will be the German IFO business climate data. This economic release has been robust for an extended period and if the announcement is above the consensus forecast for September then some bullish momentum may be inspired within the EUR, which has already established some firm ground and stability post-Draghi’s speech on Wednesday.

GBPNZD

The GBPNZD is bullish on the daily timeframe. Prices are above the daily 20 SMA and the MACD has crossed to the upside. A breach above the 2.4600 resistance may open a path to the 2.5000 level. A move back below 2.4000 invalidates this daily bullish outlook.

GBPUSD

The GBPUSD is technically bearish on the daily timeframe. Price is below the daily 20 SMA and the MACD has crossed to the downside. The next relevant support is based at 1.5170. Prices may correct back to the daily 20 SMA before the continual move back down.

USDCHF

The USDCHF remains bullish on the daily timeframe as long as prices can keep above the 0.9650 support. Prices are above the daily 20 SMA and the MACD has crossed to the upside. The next relevant resistance is based at 0.9900.

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