Home Forex Forex Market Analysis Daily Abstract – 6th February 2018

Daily Abstract – 6th February 2018

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Hot Topics:

  • USD – ISM Non-Manufacturing PMI helps to boost the Dollar.
  • DOW – Plunges more than 1,500 pts and erases 2018 gains. Are we starting a bearish market?

 

Main currencies daily performance.

USD – ISM Non-Manufacturing PMI helps to boost the Dollar.

The ISM Non-Manufacturing PMI (MoM) was released today. It reaches 59.9 in January, the forecasted level was 56.5 according to a Reuters survey. The ISM release shows a continuation of expansion in the services sector for more than 90 months. This optimistic scenario in the services sector has helped the Dollar which has increased for the second consecutive day (0.64%) reaching the 89.550 level.

 

The Dollar Index has exceeded the maximum registered on the 30th of January, activating a Trader Vic 1-2-3 pattern, which could lead to a short-medium term objective to the level of weekly R3 (90,645).

US Dollar Index 30-min. chart ( click on the image to enlarge)

DOW – Plunges more than 1,500 pts and erases 2018 gains. Are we starting a bearish market?

The U.S. stock markets plunged in a high volatility session; Dow Jones fell 5.5% erasing the yearly gains losing 2.43%, S&P 500 looses 1.95% in 2018. The worst performance during 2018 is in the European markets, the FTSE 100 today has closed with loses of 3.73%, accumulating loses of 8.21% during 2018; in the same way, the DAX 30 also drops 3.23% in the first session of the week, registering losses of 5.69% in the year.

Making a bit of history During the month of October 1987, the so-called “Black Monday” occurred, where the American stock market plummeted more than 20%. The media began to transmit the feeling of panic due to the collapse of the stock markets. We invite the reader to observe and reflect on this movement of the market.

 

October 1987 Dow-30 daily chart ( click on the image to enlarge)

 

The market’s history tends to repeat the same pattern.

Feb 2018 Dow-30 daily chart ( click on the image to enlarge)

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