Daily Market Review — 19/04/2016
Eurozone ZEW Economic Sentiment is today’s focal point.
During Monday’s trading session the currency pair trended upwards as there was some depreciation in the U.S. currency. It seems as if the USD is still feeling the aftereffects of the poor industrial production report that surfaced on Friday. Additionally, there were speeches made by Federal Reserve Bank of New York President William Dudley and Federal Reserve Bank of Boston Eric Rosengren. Both noted in their speeches that although U.S. economic conditions are “mostly favorable” the Federal Reserve is still cautious in raising the interest rates because threats still exist.
Today, at 9:00 GMT Germany will release its ZEW Economic Sentiment which may impact the currency pair. Additionally, there will be important data on the U.S. building permits at 12:30 (GMT). However, this week’s main event will be the highly important ECB meeting, which is scheduled for April 21.
Resistance: 1.1325, 1.1365, 1.1410
Support: 1.1270, 1.1220, 1.1170
Yesterday the Australian dollar opened with the sharp fall due the failed Doha meeting to curtail oil production. (Australian currency is considered a commodity currency which is why it fell in reaction to the Doha meeting. However, during the day all the commodity currencies, including the Australian dollar, recovered all of their losses thanks to a sharp recovery in oil prices. Additionally, the AUD was supported by positive New Vehicle data, outperforming the expectations of many analysts. This morning, the Reserve Bank of Australia’s Meeting Minutes were presented. It was stated that additional stimulation of the Chinese economy will lead to an increase in demand for iron ore, which is one of Australia’s major export commodities. Further dynamics of pair will depend on the commodity markets’ situation as the economic calendar is almost empty today.
Resistance: 0.7515, 0.7550, 0.7600
Support: 0.7455, 0.7415, 0.7370
Yesterday just after the market closed, IBM published its quarterly report. The company’s profit for the first quarter of the fiscal year is $2.35 per share, which proved to be better than the $2.09 per share forecast. Revenue for the company is $18.68 billion, slightly below analysts’ average $18.82 forecast. During yesterday’s trading session shares rose by 0.49%, however, after it concluded shares prices showed a drop. Today’s trading is likely to commence with a bearish gap, which should ultimately close during the session.
Resistance: 153.80, 156.80, 159.20
Support: 149.20, 145.60, 142.75
Crude Oil Futures
“Black gold” started the new trading week with a sharp fall, fueled by the failed Doha meeting. However, after negotiations, participants agreed to go back to this question just after OPEC’s meeting in June. By this time Iran will have time to ramp up production to 4 million barrels per day (which was the level before the sanctions). Despite the poor opening oil prices rebounded significantly and recovered most of the lost ground. Additionally, prices were buoyed thanks to a strike instigated by oil producers in Kuwait. This led to more than a 60% drop in production volumes. Further trading dynamics will depend entirely on the mood of investors.
Resistance: 41.60, 42.30, 43.20
Support: 40.80, 40.00, 39.30