Daily Market Review — 11/08/2015
The People’s Bank of China Changed the Methodology of Calculation of the Yuan’s Currency Rate
Yesterday saw no significant news for the pair on the economic calendar. The pair continues trading based on the Friday’s government report on employment in the United States. The dynamics of the pair were affected by technical factors. The release of the Sentix Investor Confidence in the Eurozone, which came out at 18.4 or slightly worse than analysts’ expectations – 18.5, had some influence on market as well. The biggest impact had statements of the Fed Vice Chairman Stanley Fischer and his colleague Dennis Lockhart. The first said that the labor market is feeling quite normal, but inflationary pressure falls short of the Fed’s benchmark. In addition, he noted that the first rate hike is not predetermined. On the other hand, Lockhart hinted at the uncertainty with the timing of the first rate hike, but in a softer tone. These statements triggered massive selloff of the US dollar against the major currencies. Today, market participants should pay attention to the publication of the ZEW Economic Sentiment in Germany and the Eurozone at 09:00 (GMT).
Resistance: 1.1032, 1.1072, 1.1113
Support: 1.0967, 1.0923, 1.0868
Sunday’s publication the consumer price index in China pushed commodity currencies of its major trading partners under pressure. That is why, in the absence of economic news, the pair showed a negative trend yesterday. And with that, the picture changed dramatically in the second half of the day. After statements of the Fed Vice Chairman Stanley Fischer and a member of the Federal Open Market Committee Dennis Lockhart, the dollar fell under pressure. Both voting members hinted that the start of rate hikes has not yet been determined. This morning the People’s Bank of China changed the method of calculating the rate of the national currency to the US dollar. Since New Zealand is a strategic trade partner of China, this fact put pressure on the local currency.
Resistance: 0.6631, 0.6652, 0.6671
Support: 0.6536, 0.6520, 0.6503
Yesterday, the major stock exchanges in Europe opened falling. Then, during the day quotations moved to growth, gaining support from a growth of stocks in the mining and technology sectors of the Eurozone. Investors also continue to assess the latest data on the Chinese economy, where the government should likely speed up the restructuring of the domestic economy. In addition, the positive impact on the dynamics of the indices had a recovery in commodity prices.
Resistance: 11619.87, 11669.38, 11787.44
Support: 11427.55, 11379.95, 11307.59
Light Sweet Crude Oil
As reported on Friday the oil and gas service company Baker Hughes, the number of active rigs in the US last week rose by 11 units. This, along with the strengthening of the dollar, is putting pressure on oil prices. For this reason, the beginning of the new trading week was marked by a gap down. Then, during the day oil quotes have been able to win back some loses. In the afternoon, the oil prices showed a confident growth amid weakening of the US dollar. Today, market participants should pay attention to the publication of the US crude oil inventories data by the API at 20:30 (GMT).
Resistance: 44.97, 45.41, 46.18
Support: 44.42, 43.50, 43.00