South Korea Reacts

South Korea has conducted a missile drill and the live-fire saw “ballistic missiles launched from fighter jets and the ground,” in response to North Korea’s sixth nuclear test on Sunday. North Korea stated it successfully conducted a test of a hydrogen bomb and the explosion created a magnitude-6.3 tremor, thus making it the most powerful weapon Pyongyang has ever tested. The United Nations Security Council was expected to meet and discuss fresh sanctions against the isolated regime later during the day. The Japanese yen edged higher against the US dollar earlier today after North Korea’s powerful nuclear test.

source:BBC News, Reuters

U.K. releases its Construction PMI for August at 08:30 GMT today, investors should this report closely as it will allow them to get an idea of the current business conditions. Also, the Eurozone report is PPI for the month of July at 09:00 GMT. The U.S. market and Canadian market remain closed today for Labour Day. Meanwhile, the Australian dollar dropped against its U.S. counterpart today after the release of downbeat Australian data and the AUD/USD slipped 0.13 percent to $0.7957 as company operations fell by 4.5 percent in the second quarter.

McDonald’s is facing its first strike in the U.K. as workers in two restaurants walk out in a dispute over pay and conditions. The Bakers, Food and Allied Workers Union stated that McDonald’s staff were demanding a wage of at least £10 an hour, as well as more secure working hours. Elsewhere, Gold prices rallied to their highest in around twelve months as geopolitical tensions tend to boost demand for safe-haven assets after North Korea’s test over the weekend.

Technical Analysis

JPN225

JPN225

The Japanese Nikkei 225 is clearly following a bearish trend for today as it started off its session on a negative note and was dragged by pullbacks. Around 03:00 UTC, it was quoted at a low level of 19505 points, trading lower as Asian market is pressured by elevated tensions on the Korean Peninsula early on Monday after the North stated it tested a bomb over the weekend.

SPX500

SPX500

The Wall Street index gained strength on Friday after the U.S. economy added 156,000 jobs in August and it was quoted at a record high of 2479.6 points around 16:00 UTC. It successfully picked up some heights in last week’s session but it is seen moving towards a downtrend for today after North Korea’s test of a hydrogen bomb. It is trading with much volatility on Monday but is expected to fall through the day, keep a close watch.

EUR/GBP

EUR/GBP

Last week, the EUR/GBP pair was quoted trading at a record high at the 0.93053 level but eventually started losing value on the foreign exchange market and is now trading below the 0.92220 level. It initiated today’s session on a positive note at 00:00 UTC, followed by many bullish candles and it could thus maintain an uptrend through the day. This currency pair is available for trade with the Long Term tool. It could rally a bit and match last week’s level in case the pound or the euro rises or falls on the market.

Things to watch on the market

Tip 1

A higher yen led the USD/JPY pair to fall on the currency market, thus investors can consider the EUR/JPY, AUD/JPY and GBP/JPY pairs with the Option Builder.

 

Tip 2

It is advisable to trade the EUR/GBP, GBP/CAD, GBP/JPY, EUR/AUD, and the AUD/JPY.

 

Tip 3

Shares of fast-food giant McDonald’s should be traded as stocks remain impacted by this strike, along with Gold which jumps to new all time highs.