Daily Market Review – 06/01/2016
US Economic Statistics Will Be the Spotlight Today
In yesterday’s session the pair continued its decline started early this year. This was facilitated by the general strengthening of the US currency. Despite the publication of positive statistics on the index of business activity in the UK construction sector, the British currency depreciated significantly against the US dollar due to the attitude of market participants towards risk. The further dynamics of the pair will depend on the publication of a number of important economic statistics. For example, at 09:30 (GMT) UK is to publish an index of business activity in the services sector, this index accounts for over two-thirds of British GDP. Also, at 13:15 ADP will present data on changes in the number of employees in US. This report will foreshadow the publication of the NFP report on Friday, which provides more insight into the US labor market. Moreover, at 14:45 (GMT) and 15:00 (GMT) the index of business activity for the services sector and the Markit index of business activity in the service sector from the Institute for Supply Management (ISM) will be released. At the same time there will be published a report on US factory orders. And finally, one of the most significant events today will be the publication of the minutes from the US Federal Reserve last meeting; it will be published in the 19:00 (GMT).
Resistance: 1,4783, 1,4864, 1,4931
Support: 1,4636, 1,4605, 1,4562
The Japanese currency price continues to rise against the US dollar, investors don’t want to risk after the Chinese authorities lowered the rate of its national currency. This is why investors bought yen as a safe haven asset. This morning, the People’s Bank of China has once again lowered the rate of the yuan, thereby causing concern among investors in the power of the Chinese economy. Also, data on the index of business activity in the services sector by Caixin/Markit China were published today. The index was much lower than forecasted. This is the second negative report on the Chinese economy since the beginning of the year, as the first was for the manufacturing sector. This became the reason of investors’ fears about the health of the second largest economy in the world. Today, the dynamics of the pair may be affected by the publication of US statistics, which should be allocated among the changes in the number of employees from ADP and publication of the minutes of the FOMC meeting.
Resistance: 118,90, 119,61, 120,03
Support: 118,36, 118,05, 117,44
In yesterday’s trading the major US stock markets finished in the zero zone, thus stopping the fall that began on the first day of the new year. Let’s remember that the negative trend was caused by the publication of the Chinese manufacturing index, which has not met expectations. Yesterday, data on business activity in New York, as well as the index of retail sales in the US supported the markets, as they were slightly above the average forecast of analysts. Nevertheless, today’s trading was again marred by weak statistics on the index of business activity in the services sector by Caixin/Markit China, thereby causing serious concerns about the health of the Chinese economy. Meanwhile, investors are preparing for Friday’s NFP report. Today, a huge set of important economic statistics in the USA will be released and it may impact the dynamics of trading.
Resistance: 17020,71, 17108,94, 17254,63
Support: 16884,97, 16817,07, 16739,01
Light Sweet Crude Oil Futures
Quotes of the «black gold» continues to fall in yesterday’s trading, as weak data on the Chinese economy increased pessimism among investors, and the pessimism was exacerbated by the global oil market glut. Despite the conflict in the Middle East, oil will continue to fall in the medium term, because oil-producing countries refused to reduce the volume of production. Yesterday’s publication of the oil reserves of the US Institute of Petroleum supported the market. Thus, according to presented data, stocks fell by 5.6 million barrels compared to expectations of an increase of 2.75 million. Today, the oil market received another batch of negative data from the Chinese PMI in the service sector, indicating a serious slowdown in the economy’s second largest oil consumer. Another drop in prices can stop only with the help of positive statistics on stocks from the US Department of Energy. The statistics will be published today at 15:30 (GMT).
Resistance: 36,20, 37,34, 38,30
Support: 35,74, 35,06, 34,28