Last Friday intraday volatility rose as expected when Non Farm Payroll data and Unemployment Rate were released.Job data disappointed the consensus, as the 151k data was 29k beneath the expectation. Even FED Fund futures estimate a 21% probability of a rate hike this month risky assets are losing momentum. The CBOE VIX Index after the bearish monthly spike made following Brexit went nearly its 3 year low, as equity indices rose to unchartered territory. The rally could end this month as October remain statistically a weak month for long positions on equities, and higher highs this quarter were made on decreasing volume.
This is not a bearish call however, as the S&P500 is less than 15 points from its record high, and is necessary a technical condition to assume that sentiment has changed. Beneath 2,155 the lower side of the short term trading range would be broken thus a bearish wave could start its development.
Crude Oil lost ground for 3 consecutive sessions, and rebounded on the 61.8% Fibonacci Retracement of the bullish wave that was generated at the beginning of August.The commodity lost 10$ from its 2016 top reached June, and now from a technical perspective there are 3 relevant supports:
43.33 $/barrel, is the 61.8% Fibonacci tested last week.
Area 42 $/barrel, the 200 Daily Moving Average and then the 39.6. This level would be a change in polarity for the commodity.
Above 47 $/barrel market buyers could feel in control again.
Fundamental factors could keep wide the weekly price range of the commodity, even geopolitical instability seen so far did not increase the historical positive volatility smile of the commodity.
Major FX Pairs, Performance and PIPS.
USDJPY Daily Chart: The rate is making a symmetrical triangle, thus reducing its range before to trend.
Weekly Market Commentary 03-10 September 2016
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