LONDON, August 13, 2015 /PRNewswire/ --
Markets are set to commence the day on a softer footing after Wall Street rallied strongly off its lows with investors believing that the recent moves by the PBOC to devalue the renminbi have put a nail in the coffin for a September rate hike from the Fed. This move has formed a clear "hammer" candlestick formation in the Dow Jones index, which is seen as a bullish signal in a downward trend, on top of this the S&P 500 has yet to close below the significant long term trend line indicator 200 day moving average, both of which could attract buyers back into equities and certainly European stocks are expected to see a bounce this morning. The dollar meanwhile suffered its biggest one day fall for six months and Treasury yields bombed for the second day in a row casting serious doubt over whether in just over a month's time we'll see the commencement of monetary tightening from the Federal Reserve.
The dollar has recovered a little ground overnight with EURUSD retreating from the 1.1200 level is hit yesterday forming a short term double top making this a key level of resistance for the single currency. Today the key event is the release of US retail sales data at 13.30 UK time and if this is softer than the expected month on month figure of 0.5% then this could cause the dollar to have another leg downwards.
Angus Campbell, Senior Analyst
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