Currencies
- The euro (EUR) continues with lower lows over the short term having dropped over the week from 1.3817 down to 1.373. The single currency may reverse the trend should a weaker dollar emerge from today’s developments.
- The US dollar (USD) has managed a push higher against the Japanese yen (JPY). The greenback has reached 98.02 from 97.43 yesterday morning. The market is perhaps expecting a more hawkish FOMC statement this afternoon and better than expected ADP Non-Farm Payrolls from the US.
Equities
- The UK 100 (FTS) is looking at higher highs as it reached a five month high at 6761. Higher equities could indicate markets expectations of extended monetary easing by the Fed.
Commodities
- WTI crude (OIL) has been on negative outlook as the energy commodity dropped from 112.25 to 97.68. As supply restrictions relax with tensions in the Middle East subsiding, and global growth looks bleak; look at a continuation of the bearish trend on energy prices.
Mover & Shaker with FX Options
- Gold (XAU) looks like it has reversed its bullish trend on expectations of a stronger dollar. The precious metal fell from 1360 to 1345 as markets expect some news of a potential taper by the fed.
- Taking into account the expected volatility pick up later in the day, options traders will be aiming for strategies to protect their capital over the medium term. A straddle on gold could prove beneficial as any positive ADP data or any hint in the FOMC statement may swing the market high or low. Options traders will be looking at buying at the money Puts and Calls on Gold to capitalise on the move.
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