Daily Market Review — 10/12/2015
Swiss National Bank and Bank of England Interest Rate Decisions are Main Events of the Day
The pair showed strong recovery yesterday after it’s been falling for three sessions in a row. Such dynamics were caused, first of all, by the general weakness of the US currency, which is reflected in other currency pairs. Meanwhile, according to the report of the British Chamber of Commerce, we will see a steady growth of the national economy in the near future. In general, the assessment of current economic situation was positive. Nevertheless, markets are awaiting the Bank of England Interest Rate Decision and the Asset Purchase Program, scheduled for 12:00 (GMT). The accompanying statement and the minutes of the BoE last meeting will be released the same time. Market participants widely expect the British regulator will leave the parameters of monetary policy unchanged. Recall that interest rates are at a record low at the moment for the entire three hundred years history of the Bank of England. Today’s data on the US labor market, scheduled for 13:30 (GMT), may also have some influence on dynamics of trading.
Resistance: 1.5195, 1.5246, 1.5309
Support: 1.5125, 1.5050, 1.4955
Swiss franc showed a slight strengthening against the US dollar yesterday, which was supported by the weakening of the latter. This correction was anticipated for a long time, as the US dollar is highly overbought at the moment. Meanwhile, today’s dynamics of the USD/CHF will be highly influenced by the Swiss National Bank Interest Rate Decision to be announced at 08:30 (GMT). Its decision will be followed by a press conference. Market participants should also pay attention to the publication of US labor market data at 13:30 (GMT). Besides that, tomorrow will be published one of the most important reports on the US economy, Retail Sales.
Resistance: 0.9876, 0.9958, 1.0027
Support: 0.9817, 0.9763, 0.9704
The major European stock indexes continued their downward trend yesterday, which was caused by the fall in commodities. Meanwhile, it is worth noting that investors are reluctant to invest in securities in anticipation of the Fed meeting next week. It is widely expected that the US regulator will take the first step towards tightening monetary policy, which will have a negative impact on the stock markets. Statements of some representatives of ECB had some influence yesterday. It was noted that the decision to expand the incentives were right. However, a decline of the forecast for economic growth of the German institute IFO put pressure on European stock markets. Short-term prospects of stock markets in Europe remain negative.
Resistance: 10627.40, 10728.40, 10864.60
Support: 10446.82, 10338.45, 10199.25
Quotes for the precious metal rose slightly in the first half of yesterday’s trading session, taking advantage of the general weakness of the US currency. And with that, the growth of gold prices was stopped after the US dollar reached a month low against the euro and the yen. The US dollar has recently enjoyed increased demand on expectations of a rate hike by the US Federal Reserve. This step is widely expected to be taken at the meeting on December 15th – 16th. According to some analysts, market has already priced in such a move by the Fed. However, the volumes of trading will be limited before the announcement of the Fed decision. Today’s dynamics of trading may be influenced by a publication of data on the US labor market, scheduled for 13:30 (GMT).
Resistance: 1080.51, 1088.04, 1093.10
Support: 1068.91, 1065.15, 1057.93