Forex Signals Brief for Oct 23: Is Wall Street Looking Shaky?

Wall Street continues to be sitting on shaky ground as investors weigh up exactly what the future holds. The strong state of the economy is clear for all to see. But the implications of the recent strength are making many question whether the proposed interest rate hikes are coming too thick and fast.

At least that has been the opinion of some analysts recently and certainly President Donald Trump.The hawkish update we all saw in the FOMC minutes has meant that markets are now pricing rate hikes in December and two in 2019. While that might help the USD, many are suggesting that it will weigh on corporate profits.

As it stands the SPX is delicately positioned, trading just above its 200 SMA. If we crack that level there might well be more selling ahead. And it is something that will likely spread to other stock markets worldwide.

Today the calendar is thin in terms of the top-tier releases, but as we move into the latter stages of the week we have with the BOC and ECB as well as US GDP to look forward to. We are also right into the US earnings season as well, so that will likely see the stage for the next few weeks.

Forex Signal Update

It was a busy day to start the week and the FX Leaders Team finished with 3 wins and 3 losses.

DAX – The DAX is moving towards key support at 11400, so watch for a buying opportunity if it holds, or a sell if it cracks.

NZD/USD – Active Signal

The NZD/USD has bounced nicely off the lows at a time when other commodity currencies have been weak. Given the fact that the AUD/USD is really struggling it might well help drag the Kiwi down with it.

GBP/USD – Pending Signal

The GBP/USD continues to be pushed around on Brexit headlines. The news has been driving prices down and that might be a lead we can go with coming into Tuesday. We are now below 1.3000 with support at 1.2900 in focus.