Daily Market Review — 06/04/2016
Forex is waiting for U.S. FOMC meeting minutes
The currency pair trades in a tight range after last week’s sharp movements.
The European currency is under pressure before the publication of U.S. FOMC meeting minutes. Fed’s statements were rather dovish and had to weaken the US Dollar, but it didn’t happen. A lot of market participants believe that the US dollar is already too weak, and regardless of meeting minutes’ content Dollar’s drop in short-terms is limited. Due to that fact, a number of investors expect the growth of the US currency and the EUR/USD pair’s fall. However, no one dares to do drastic steps before the minutes’ publication. As for the medium term, most investors put on the EUR/USD pair’s increase to 1.1600.
It should also be noted that in recent years, the so called “Greece question” becomes more and more important, and of course, puts some pressure on the Euro. The “Brexit” referendum is scheduled for June 2016, and has also had a negative impact on European currency.
The Australian currency is exposed because of oil quotations, other commodities and the US dollar.
Most market participants believe that the pair AUD/USD climbed too high and now has a very good chance of a downward correction. Resistance levels could be 0.7477 area or close to it.
Major stock indexes in Europe closed yesterday’s trading in the red zone. One of the main reasons for the sale was sharply negative data on German economy. Both the services PMI and Germany factory orders were worse than analysts’ forecasts.
While services PMI isn’t so bad (actual: 55.14 forecast: 55.5), the manufacturing area has real problems. Instead of the expected growth in value by 0.2%, the factory orders drop by as much as 1.2%. Although today’s data on Industrial Production (down 0.5% against the forecast of -1.8%) made the situation a little bit better. In general, German economy is starting to show some slowdown.
Apple vs. Google
Yesterday the sales of the budget iPhone version, the iPhone SE, officially started in Russia. In the US and it had a wider range of potential buyers.
However, it should be noted that next week quarterly reporting season will be starteing soon and one of the most interesting question is whether Google will stay the most valuable company in the world, or Apple will replace it. Let us remind that during the last season of quarterly reports Apple lost its position because of Alphabet’s (Google) financial results.
Quotes of oil react to any news about oil producers meeting on April 17 in Qatar. Another important factor is the statistics of inventory levels in the United States.
Data from the American Petroleum Institute showed an unexpected drop in inventories by 4.3 million barrels against the forecast of growth of 2.9 million. Oil prices reacted with growth. At the same time, market participants expect today’s publication of similar data from the US Energy Information Administration’s.