Daily Market Review – 04/01/2016
Main Events Today – Publications of the Manufacturing Business Activity Index in China, Britain and Germany
2016 starts with the British pound dropping against the US dollar, mainly caused by the aggravation of the situation in the Middle East, but also due to the Chinese data on manufacturing activity disappointing market participants. The British currency is dependent on the China’s economy, because the Chinese economy is a major partner of the UK’s economy. The current dynamics of the pair, in addition to the influence of external negative factors, will be affected by the publication of economic statistics for the UK. For example, at 09:30 (GMT) data on the volume of lending and the index of manufacturing activity PMI will be published. Also, at 14:45 (GMT) the US is to provide a similar report. At 15:00 (GMT) the ISM will be published in the US.
Resistance: 1,4783, 1,4864, 1,4955
Support: 1,4689, 1,4631, 1,4566
Negative Chinese data strongly pressured the pair, with it losing more than 100 points after opening. This was in part caused by the publication of the manufacturing PMI index from Caixin/Markit in China, the index was below the average forecasts of experts – 48.2 vs. 49. In addition, the Australian dollar was under pressure due to the worsening situation in the Middle East between Iran and Saudi Arabia. In particular, Asian countries, and especially China, are the main export markets for Australian resources. That is why today the Australian currency is likely to be under pressure during the day. Meanwhile, the dynamics of the pair may also be affected by the publication of the index of business activity in the manufacturing sector and the manufacturing index from the Institute for Supply Management (ISM) in the United States, scheduled for 14:45 (GMT) and 15:00 (GMT), respectively.
Resistance: 0,7247, 0,7282, 0,7333
Support:: 0,7206, 0,7160, 0,7115
Major US Stock Indexes closed in a negative trend on profit taking by investors on Thursday. The current negative trend is caused entirely by negative economic data from China, as well as the rupture of diplomatic relations between Iran and Saudi Arabia, which causes conflict in the Middle East. Because of such a background, investors prefer to get rid of the securities and transfer to more secure assets such as gold and the Japanese yen. However, to date the dynamics of trade may be impacted by US economic data, which will be presented today.
Resistance: 17254,63, 17339,34, 17407,35
Support: 17154,41, 17106,69, 17050,62
Light Sweet Crude Oil Futures
Last week the quotations of “Black Gold” were in a downward spiral, aided by statistics on stocks of the Institute of Petroleum and US Department of Energy, which pointed to a significant increase in stocks of raw materials. Meanwhile, in 2016, the conflict between Iran and Saudi Arabia continued. Both countries are major players in the global oil market, and the conflict between them may lead to disruptions of oil supplies from the region. This news pushed oil quotations up, enabling them to gain a foothold above the level of 37 dollars per barrel. Technically, the correction in the oil market had to be made long time ago, and the last conflict served as a driver for its start. However, in the medium term, oil quotations will move again to fall against the backdrop of over-saturation of the world market.
Resistance: 38,30, 38,96, 39,89
Support: 37,34, 36,58, 35,74