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S&P 500 Misses Record High

EUR/GBP – Weekly Candlesticks
Source: GKFX / MT4 (August 14, 2020)

EUR/GBP is still in a 1000-pip trading range despite all that has happened in the pandemic. Shorter-term, the trend has been higher as the price approaches 0.93 resistance.
 

TAKEAWAYS


•    S&P 500 misses out on record high for 2nd day
•    Gold rebound sticky at $1950 
•    China Retail sales and Industrial production miss
•    GBP: Next round of post-Brexit EU/UK trade talks next week
•    DAY AHEAD: Eurozone GDP, US retail sales
 

MARKETS


The S&P 500 narrowly missed out on moving beyond its February peak to make a record high for a second day on Thursday. A new record feels inevitable because the price is so close now but so far it has proven elusive. Again it was tech stocks like Apple leading the charge, while cyclical stocks lagged. European shares closed lower on Thursday with German steelmaker ThyssenKrupp shares dropping 16%.
Shares in Asia were mixed early Friday with China stocks brushing off economic data that fell short of expectations. China retail sales unexpectedly declined on an annual basis when a small gain was expected. Strong bank earnings continue to drive Australian shares higher with National Australia Bank leading the charge on Thursday.

The US dollar dropped on the day but was off its lows following the first initial weekly jobless claims data under 1 million since the outset of the pandemic. 92.5 remains support in DXY. EUR/USD reached 1.185 but backed away before 2-year highs at 1.19.

Gold and silver gained ground for a second day following Tuesday’s big sell-off. $1950 has been tough resistance for gold, while silver moved back over $27 per oz. Crude oil prices dipped after making the highest close since March on Wednesday.
 

GURU WISDOM


"Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
 

USD: Jobless < 1M


US economic data has been on the rise ever since last week’s NFP topped expectations. This week inflation and jobless claims have surprised on the upside, which has underpinned the dollar and prevented a continuation of July’s downtrend.
 

China data


Economic data from China has come in a little softer than hoped in signs the economic recovery could be faltering slightly. Industrial production rose 4.8%, unchanged from last month and retail sales fell -1.1% when a 0.1% rise was expected. Sales have fallen for seven months. It was hoped the reopening of cinemas might have made the difference, but attendance rates are still below average.
 

Brexit talks


The idea of the next round of UK-EU post-Brexit negotiations taking place next week saw the British pound ease off a two-day decline. Traders are still awaiting a ‘breakthrough’ moment that could unleash extra strength in Sterling. The talks are scheduled for August 18-21, opening with a dinner and finish with press conferences given by the two chief negotiators Barnier and Frost.
 

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