Daily Market Review — 18/01/2016
Data on Industrial Production in Japan –Main Event Of The Day
The pair experienced a negative trend during Friday’s session, caused by increased demand for the Japanese currency. The Japanese Central Bank’s Haruhiko Kuroda supported the yen in his speech, noting that today there is no apparent reason for the further easing of monetary policy. Also, demand for the yen as a protective asset has arisen in response to the publication of negative statistics on lending in China. Statistics on the balance of trade in the Euro area, which amounted to 23.6 against the previous level of 24.1, influenced the pair. Today, in the morning, indicators were presented of industrial production in Japan in the final assessment. Thus, according to published data, in November the figure was -0.9% vs. -1.0% (according to the forecast). In annual terms, industrial production grew by 1.7% against the average forecast of 1.6%. Today, there will be no news about the Eurozone economy, so the pair will react to the external background.
Resistance: 128.17, 128.68, 129.46
Support: 127.29, 126.73, 126.14
During Friday’s session, the Australian dollar lost its position. Such dynamics were caused by concerns over a slowdown in the Chinese economy. As we know, China is a strategic partner to Australia. These concerns have only intensified after the publication of the index of credit in China, which came out much lower than the experts expected. Also, investors bought the Japanese currency because of the collapse of the world’s markets. Today, inflation data in Australia may have some effect. The index was 0.2% against an average forecast of 0.1%. Data on vehicle sales in Australia, which fell slightly in December, both in monthly and annual terms, also may influence the pair’s dynamics. The current dynamics of the pair will depend on investors’ risk appetite.
Resistance: 81.33, 82.16, 83.37
Support: 79.56, 78.71, 77.89
During Friday’s trading day, the main US Stock Markets fell more than 2%. This was facilitated by another drop in the price of crude oil over concerns about weak demand from China, as well as excess supply in the global market. US data exerted strong pressure. Thus, according to statistics provided by the producer, price index fell in December amid energy prices’ falling. Also, retail sales and industrial production in the US have raised concerns about the strength of the first economy in the world. These figures have shown a significant reduction. Meanwhile, the manufacturing index from the Federal Reserve Bank of New York fell to its lowest level in six years. In addition a speech by the Fed’s Dudley, who noted that the steps of the US regulator will be restrained, and the rate hike will take place at a moderate pace, had some effect.
Resistance: 1892.09, 1904.93, 1924.74
Support: 1860.54, 1848.22, 1833.22
Light Sweet Crude Oil Futures
Quotes of “black gold” fell below the psychological mark of $30, updating the multi-year lows at 28.32 dollars per barrel. Such pessimism in the oil market was caused by concerns about the Chinese economy after the publication of a number of negative indicators of development. In addition, concerns about the market entry of Iranian oil also put pressure on the stock. Let us remember that China is the second largest oil consumer after the United States. Last year, demand from the Chinese economy was moderate, and this year it is expected to fall. Also Iran, after the final lifting of sanctions, is preparing to add to the world supply an additional 1 million barrels per day, which had a negative impact on the dynamics of oil prices. Against this background, many large banks have revised their forecasts for the cost of a barrel of oil in the current year. Economic statistics from the US, presented on Friday, did not raise optimism amongst investors, and had a negative effect on price movements.
Resistance: 29,89, 30,81, 31,68
Support: 28,32, 27,50, 27,00