Trading plan for 11/10/2018

The main impact goes through the stock market with the index in Shanghai losing at some point 5.0%. Drops also affect the raw materials, but already on currency market nervousness is felt to a lesser extent. There is no one direct reason for market panic, or rather there is a fuss about China, high US debt yields and Hurricane Michael striking the US. Hurricane Michael reached Florida with a wind speed of 250 km / h, making him the strongest hurricane at the US coast since 2004.

Chinese Shanghai Composite lost 5% in the morning, although now we see some recovery (-4.4%). In Japan, Nikkei225 drops 4.1%. The stock markets are continuing the sale of Wall Street, where Nasdaq fell by 4.4%, and the SP500 lost 3.3%. It is the largest one-day sale from February.

Yields of 10-year treasury bonds suffered market tensions and profits from recent increases pushed them by 7bp to 3.15%. This has been weighing on the value of USD, where this correlation has recently been the main driving force behind the rises. As a result, EUR / USD rebounded to 1.1570, and GBP / USD was at 1.3220. USD / JPY reaches up to 112.20 on a combination of a falling stock market and lower yields. Despite this, forex changes are relatively small (<0.5%) compared to the stock market. Generally, it can be considered that risk aversion manifests itself by escaping not to safe havens, but from "crowded" positions.

On Thursday, the 11th of October, the event calendar is busy with important data releases. The main event of the day is ECB Meeting Minutes release. Except this, France will post Consumer Price Index data, the same will post Spain. The UK will present BoE Credit Conditions Survey data and Canada will release New Housing Price Index data. And last, but not least, the US will post Consumer Price Index data, Unemployment Claims data and Crude Oil Inventories data. There are spechees scheduled for today as well from BOE Governor Mark Carney and MPC Member Gertjan Vlieghe.

Crude Oil analysis for 11/10/2018:

On the commodity market, supply prevails. WTI oil prices are currently falling 1.5% after 3.2% drop yesterday. However, it should be remembered that due to a hurricane part of the drilling platforms in the Gulf of Mexico has been closed, therefore there are reasons for the prices to remain at an elevated level.

The API report pointed out that last week US crude oil inventories increased by 9.75m bbl - much more than expected before today's DoE report of 2.17m bbl. For today there is a scheduled Crude Oil Inventories data release and the market participants expect a drop to 2,3 mln barrels.

Let's now take a look at the Crude Oil technical picture at the H4 time frame. The market is still trying to resume the uptrend after the trend line was broken. The bounce from the level of 66.85 has reached the level of 70.15, which is just below the technical resistance at the level of 70.37. Nevertheless, to continue with the uptrend, the bulls must break through the high at the level of 71.40 and move even higher. Today's data might trigger this kind of move up as the market is not yet completly overbought.

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