Daily Market Review — 05/11/2015
BoE’s Interest Rate Decision Is the Main Event of the Day
The pair continued on a negative trend for the third consecutive trading session. This was caused by a general strengthening of the US currency. More exactly, the GBP/USD pair was affected yesterday by economic statistics coming from the US economy. In particular, the Services PMI index in the US came out significantly higher than forecasted. In addition, Fed’s Chairwoman Yellen had a speech yesterday. She reaffirmed the possibility of raising interest rates at the December meeting, in case of positive economic statistics. Today the focus shifts to UK as the Bank of England will release an announcement on their interest rate and asset purchase program policies. The announcement is scheduled for 12:00 (GMT). The head of the bank Mark Carney will hold a press conference afterwards, at 12:45 (GMT). BoE is expected keep its monetary policy unchanged, so all the technical indicators point to a further decline of the pair.
Resistance: 1.5404, 1.5461, 1.5494
Support: 1.5359, 1.5303, 1.5241
After some correction this week the pair traded in negative territory. Yesterday’s downward trend was influenced by the negative data on the Services PMI in the Eurozone and positive data for the same indicator in the US economy, which came out significantly better than forecasted. In addition, data on the US labor market boosted the US currency as well. Fed’s chief, Janet Yellen held a press conference yesterday which added to the general optimist tone. Today’s dynamics of the pair will likely be affected by the report on Retail Sales in the Eurozone, scheduled for 10:00 (GMT). ECB’s President Mario Draghi will hold a press conference at 10:45 (GMT) and there is also the weekly report on the US labor market at 13:30 (GMT). Both these events could have an impact as well.
Resistance: 1.0897, 1.1091, 1.1282
Support: 1.0843, 1.0710, 1.0527
US stock markets were pressured yesterday by the release of several economic statistics and the speech of the US Federal Reserve chief Janet Yellen. During her speech, she said that December is the most likely time for raising rates. This was conditioned on whether the economic data will meet the Fed’s expectations. Meanwhile, stock markets were supported by data on the US labor market and the business activity index in the services sector, which turned out to be somewhat higher than forecasted. Today’s dynamics of trading will likely be affected by the speech of ECB President Mario Draghi. He recently favored the possibility of expansion for several policies that support stock markets. Some members of the Fed will also have their speeches during the day.
Resistance: 4730.77, 4767.68, 4806.24
Support: 4697.72, 4626.03, 4584.43
Light Sweet Crude Oil Futures
Quotes of the “black gold” fell significantly in yesterday’s trading. This was triggered by the strengthening of the US currency and published data on Crude Oil Stocks in the United States. According to the data, the oil inventories rose slightly to a level of 2.847 million barrels against the forecast of 2.8 million. However, the fall was limited given some underlying fears of supply disruptions amid reports that the largest US oil company temporarily suspended its work. In addition, the strike of Brazilian oil-platforms workers also added to the general concern about supply. Oil prices continue to be pressured downward by the appreciation of the American currency.
Resistance: 46.91, 47.92, 48.99
Support: 46.13, 45.12, 44.16