Daily Market Review — 18/08/2015
The Highlight of the Day Is a Release of the Price Indexes in Britain
Yesterday, without any news published in the UK. The dynamics of the pair was affected by the publication of an interview with a member of the Monetary Policy Committee of the Bank of England – Kristin Forbes, in which she noted that the delay in the first rate increase could negatively affect the UK economy. She also noted that the rate should be increased before the inflation move closer to the target level of 2.0%. It should be noted that market participants expect today’s publication of the consumer price index, retail price index, as well as output and input producers prices, scheduled for 08:30 (GMT). It should also be noted that most analysts expect to see a zero change in inflation compared to the previous year.
Resistance: 1.5594, 1.5636, 1.5659
Support: 1.5572, 1.5554, 1.5533
Yesterday’s dynamics of the pair was influenced by the expectation of the publication of the trade balance of the euro area, as well as the index of business activity in the manufacturing sector from the Federal Reserve Bank of New York. According to the data, the Eurozone’s trade surplus has shown strong growth, jumping to 26.4 against the average forecast of analysts at 19.02. As for the US, the NY Fed Empire State manufacturing index dropped to –14.92, which did not meet analysts’ expectations at the level of 5. Also, market participants continue to assess the agreement between the Eurozone finance ministers and Greece reached on Friday, which is the third bailout for Athens. Today, there is no economic news expected in the Eurozone, therefore the dynamics of the pair will depend on data on the US economy, namely housing starts and building permits, which are scheduled for 12:30 (GMT).
Resistance: 1.1082, 1.1126, 1.1188
Support: 1.1052, 1.1024, 1.0987
Yesterday’s trading on the major European stock exchanges was mixed. Investors shifted their attention from the problems in China to the Greece. Recall, on Friday, the Eurogroup approved a third package of financial aid for Greece. Some influence also had interview of the assistant head of the Bank of England Kristin Forbes, who noted that the delay in raising rates could have negative consequences for the UK economy. Also the downward pressure was caused by the publication of the NY Fed Empire State manufacturing index, which was much worse than expected.
Resistance: 11113.18, 11172.40, 11242.67
Support: 10809.63, 10735.65, 10668.14
Gold traded positively yesterday, supported by the publication of clearly negative statistics on manufacturing activity from the Federal Reserve Bank of New York. Such data could push the Fed not to raise rates at its meeting in September. In addition, investors continue to evaluate the devaluation of the yuan last week, and the consequences of this step of the Chinese authorities. Some support also came from the report that China’s central bank increased its gold reserves by 19 tons in July. The fact that one of the world’s major central banks increases its gold reserves reassures investors that gold is still viewed as a safe-haven asset.
Resistance: 1119.51, 1122.58, 1126.50
Support: 1116.30, 1111.45, 1101.60