The second debate between US presidential candidates Hillary Clinton and Donald Trump was the key event at the beginning of the week. Today’s debate was remarkable for the brutal nature of the exchanges between Trump, the Republican presidential nominee, and Clinton, his Democratic rival. He called her a “devil” that repeatedly lies, someone with tremendous hate in her heart. Clinton called him an abuser of women. Donald Trump said Hillary Clinton would go to jail if he were president and attacked her husband for his treatment of women in a vicious presidential debate less than a month before the U.S. election.
Through it all, Trump and Clinton both landed punches as they clashed over taxes, healthcare and U.S. policy in the Syria civil war.
Snap poll of debate watchers found that 57% thought Clinton won the encounter, versus 34% for Trump.
The last of three debates before November 8 elections is scheduled for October 19.
The US dollar opened with gap-higher against most of major counterpart on Monday, but quickly erased gains in Asia and returned to strength at late hours of the session. The greenback initially weakened on Friday, after US jobs report disappointed, showing that the economy added 156,000 jobs in September, compared to expectations for 175,000 new jobs and unemployment rate ticked to 5.0% in September from 4.9$ in August.
Disappointing US jobs data will require more cautious approach to interest rate policy, but is not expected to prevent Federal Reserve from raising interest rates by the end of the year.
The dollar stands at new session highs against Euro and Sterling at 1.1172 and 1.2372 respectively in early European hours and bounces from fresh 5-day low against yen at 102.79.
Near-term dollar’s action is still at the back foot, following pullback on Friday on weaker-than-expected jobs data. The dollar index recovered some ground after pullback found footstep at $96.39 on Friday, trading at $96.68 at the beginning of European session, but still well below Friday’s pre-data high at $97.20.
Sterling came under renewed pressure on Monday, following last Friday’s flash crash and subsequent recovery to 1.2470 zone. Last Friday’s sharp fall that spiked below 1.20 handle, was caused by various factors. The pound is overall weak and under strong pressure on fears of hard Brexit, with comments of French President Hollande, who confirmed tough divorce of the UK and EU, sparking strong sell-off. The fall accelerated sharply lower on thin Asian market on Friday, with algorithmic traders being blamed as computers triggered a large number of selling orders after the pound started accelerating lower. A number of market participants agree that 6% fall on Friday wasn’t realistic, however, strong pressure remains on British Pound.
Gold is at the front foot for the second day and extended bounce from fresh 4-month low at $1241, after the dollar weakened on lower jobs numbers.
However, strong negative tone persists and the yellow metal may fall further after completion of current correction. Good resistance is seen at $1280.
Asian shares gained on Monday in thin holiday trade as China markets re-opened after a week-long break. Stocks in China rose, even though tightening measures for the housing market caused the property sector to fall more than 2%. The Shanghai Composite Index gained 0.86%. Hong Kong’s stock market was closed for a holiday. Japan’s Nikkei 225 was up 0.39% from opening on Monday.
European stocks followed the sentiment and are slightly higher in the early trading on Monday.

Highlights of the day

Calendar of Monday is very light as Japan, USA and Canada are shut for holiday.

Important levels
GBPUSD
Cable maintains negative tone, following last Friday’s fresh fall. Subsequent bounce was capped at 1.2470 zone and near-term action holds within 1.2225/1.2470 consolidation range. Technical studies continue to point lower and return to 1.2000 zone is seen as likely near-term scenario, after consolidation phase is over. Good resistances above 1.2470 lay at 1.2525, then 1.2570 and 1.2720 which guards 1.2795, former critical support, now acting as resistance.
EURUSD
The Euro is down from fresh recovery high at 1.1203, with strong support at 1.1167, so far containing pullback. The single currency returned into daily cloud, following another downside rejection, this time at 1.1103. Further sideways trading is seen as likely near-term scenario, while the price holds within 1.1167/1.1220, daily cloud boundaries.
Below 1.1167, supports lay at 1.1136; 1.1122 and 1.1103. At the upside, 1.1214/20 barriers mark the first trigger, ahead of 1.1249 and next pivot at 1.1280.

WTI Crude Oil

Crude oil eased from fresh high at $50.73 on overbought studies and formed reversal Bearish Outside Day pattern. Dips were so far contained at $49.14, failing to clearly break below the first support at $49.34. Technical studies show more room at the downside and break below $49.00 support zone would trigger bearish extension towards next strong support at $47.80. Overall structure remains firmly bullish and favors further upside, after current correction. Next significant resistances lay at $51.38 and $51.65.

 , Market Analysis