Daily Market Review — 09/02/2016
Financial markets show strong reaction to oil prices’ changes
There was an increased demand for protective assets such as the Swiss franc during yesterday’s trading day, because investors tried to escape the risks. Let us remind, that in the case of financial or political crisis, investors prefer to use defense assets. This situation was caused by the catastrophic fall in global stock markets and oil prices, due to concerns over a slowdown in the global economy. In the absence of publication of important economic indicators in the US currency was under the pressure. Investors preferred less profitable, but, nevertheless, more secure assets. Today, the publication of unemployment rate in Switzerland, which was presented at 06:45 (GMT) can affect the market. Also, US JOLTs Job Openings, which will be published at 15:00 (GMT), may influence the market.
Resistance0.9904, 0.9989, 1.0074
Support: 0.9820, 0.9752, 0.9646
The pair demonstrated a negative trend at yesterday’s session, which was caused by a decrease in demand due to investors’ attempts to escape risk. Since the beginning of the new trading week stock markets and oil prices continued to fall. Also, the pressure on the British currency provided yesterday’s data on business confidence. So, according to data released yesterday Business confidence index fell to lowest level since 2013. Thus, local companies expect the fall of industrial production will be lower than long-term trend. In addition, the negative impact on business confidence provides the possibility of UK’s leaving the European Union. Today, the dynamics of the pair will depend on overall trade balance of the United Kingdom, which will be published at 09:30 (GMT).
Resistance1.4450, 1.4566, 1.4649
Support: 1.4365, 1.4250, 1.4148
Major US stock showed a negative trend yesterday, which was caused by the falling of technology and energy companies’ shares, just after the oil prices’ decline. Investors tried to escape the risks due to yesterday obtained data on China’s foreign exchange reserves, which fell to its lowest level since March 2012. This situation raises fears that there will be further Chinese currency’s devaluation, which could be the reason of the devaluation in other emerging markets. Meanwhile, investors expect the US Federal Reserve Chairman Janet Yellen’s statements, her speeches are scheduled for Wednesday and Thursday this week.
Resistance15992.00, 16149.71, 16368.21
Support: 15771.86, 15637.14, 15523.79
Light Sweet Crude Oil Futures
Quotations of “black gold” fell by more than 3% yesterday. The fall was caused by the results of Saudi Arabia and Venezuela of oil ministers’ meeting. The meeting took place this weekend. The purpose of this meeting was to discuss possible cooperation with other OPEC oil-producing countries outside the cartel. It has not been announced following the meeting of any measures to reduce production volumes. Thus, the probability of reducing production quotas is close to zero. Many investment banks predict the presence of excess oil on the world market up to 2017. Today, investors will pay attention to U.S. API Weekly Crude Oil Stock, which will be published at 21:35 (GMT).
Resistance30.59, 31.33, 32.39
Support: 29.52, 28.40, 27.50