Daily Market Review — 01/02/2016
Main Events Today – US and Chinese Economic Statistics
The pair showed mixed trends during Friday’s session due to the publication of US statistics. The US GDP for the fourth quarter of last year in the preliminary estimate is 0.7% (average forecast − 0.8%). However, the U.S. Chicago PMI was at 55.6 (forecast – 45). Today’s negative dynamics of the Australian dollar is caused by negative data on the Chinese economy, which is Australia’s largest trading partner. Thus, China Manufacturing PMI fell to 49.4 (forecast 49.6). Further dynamics of the pair will depend on the publication of the U.S. Personal Income and Personal Spending, both being presented at 13:30 (GMT). Also today the publication of the U.S. Core PCE Price Index (13:30 (GMT) is scheduled and it is important for US Federal Reserve.
Resistance: 0.7139, 0.7169, 0.7221
Support: 0.7041, 0.6994, 0.6955
Last Friday the pair showed a downward trend due to the strengthening of the US currency. The British currency fell after the publication of US GDP for the fourth quarter. The US GDP figures were impressive – they grew by 3.1% year on year, which is the highest growth over the last ten years. Remember, consumer spending comprises two-thirds of the US GDP. Today the dynamics of the pair will depend on the U.K. Manufacturing PMI, which is scheduled for 09:30 (GMT). Also, data on U.S. Personal Income and Personal Spending to be presented at 13:30 (GMT) will take the focus of market participants
Resistance: 1.4284, 1.4350, 1.4413
Support: 1.4227, 1.4147, 1.4081
Major US stock markets during Friday’s trading day showed an increase − 2%, due to US statistics. The reaction of the stock markets was the opposite the foreign exchange market after the publication of US GDP. Investors interpreted the decline as a signal that the Fed will not rush to the next rates hike. Some support was provided by data on U.S. Chicago PMI, which was well above the average forecast. Today, the dynamics of trading will depend on Chinese and US statistics.
Resistance: 1946.21, 1964.39, 1982.81
Support: 1909.70, 1895.62, 1870.31
Light Sweet Crude Oil Futures
During the first half of Friday’s trading day quotes of “black gold” showed a positive trend. It was caused by the expectation that the major oil-producing countries will agree to reduce production in order to stabilize prices on the world market. Nevertheless, oil prices started to fall due to current production volumes, which at the moment are at maximum values. As we know, sanctions against Iran were lifted and the country increased its production and supply of oil. However, representatives of Saudi Arabia said that the country will reduce production only if the other member countries of the OPEC reduce volumes. The dynamics of trading today will depend on China’s Manufacturing PMI, which is slightly worse than expected.
Resistance: 34.31, 35.56, 36.70
Support: 32.37, 31.28, 30.10