Hello traders, and welcome to Tuesday! The day began with China maintaining its one-year and five-year loan prime rates at 3.35% and 3.85%, respectively. We also received the minutes from the Reserve Bank of Australia's August meeting, revealing that a rate cut is unlikely in the short term. Looking ahead, we’re anticipating inflation data from Canada, where the CPI is expected to rise by 0.4% on a monthly basis.
Forex Market: The strongest currencies this morning are the New Zealand Dollar, Swiss Franc, and the American Dollar, while the Japanese Yen and Australian Dollar are the weakest.
Indices: Stock indices continued their upward momentum yesterday with significant gains, extending the V-shaped reversal. However, there’s growing chatter among experts that a correction could be on the horizon, as the upswing appears to be losing some steam.
Oil: The situation in the oil market remains bearish, with yesterday’s session seeing a sharp decline and today continuing in the same direction. Oil is nearing mid-term lows, and it seems likely that these levels will be tested soon.
Precious Metals: On the other hand, precious metals are holding strong. Gold is hovering near its long-term highs, and silver has seen a nice bounce since August 7th. Both metals are performing well, reflecting strong market sentiment in this sector.
Interesting Setups: One setup worth noting is the USD/CAD pair, which is dropping sharply and heading towards the key horizontal support at 1.36. It looks like we might reach this level very soon. Also, while the Japanese Yen attempted a correction yesterday, its strengthening was short-lived, and it appears that the Yen may remain under pressure for some time.