Daily Market Review — 18/12/2015
Retail Sales and CPI in Canada Will Draw the Most Attention from Investors Today
The Canadian dollar continues to lose ground against the US dollar. Yesterday’s trading session wasn’t an exception. Another decline in oil quotes and the general strengthening of the US dollar contributed to the growth of the pair. Publication of the Initial Jobless Claims in the United States has also influenced the USD/CAD. According to the data, the number reached 271,000 against an average forecast of 275,000. Today’s market participants focus will be on the Consumer Price Index in Canada, which will be released at 13:30 (GMT). Services PMI in the US, scheduled for 14:45 (GMT), may also have some impact on the dynamics of trading.
Resistance: 1.3987, 1.4156, 1.4293
Support: 1.3845, 1.3741, 1.3620
The pair rose slightly against the background of positive statistics from the US and the overall strengthening of the US currency after the increase of interest rates by the US Federal Reserve. The Bank of Japan also announced its decision on monetary policy this morning. As expected, the Japanese regulator did not change the interest rate and the money supply. Nevertheless, the central bank said it will begin its ETF buying program and expand its buying government bonds program to April 2016. The USD/JPY showed sharp movements in both directions against this background. The Japanese currency has strengthened significantly against the US dollar after the speech of the head of BoJ. During the press conference, he noted that the bank is ready to act if necessary in order to stimulate the national economy. Today’s dynamics of the pair may affected by the Services PMI in the US, scheduled at 14:45 (GMT).
Resistance: 122.29, 122.94, 123.47
Support: 121.57, 121.08, 120.33
Investors active on the European stock exchanges continue to trade based on the US Federal Reserve’s decision on interest rates. The decision was greeted with enthusiasm, especially given the prospect of further rate hikes. European stock markets rose slightly against this background. An increase in shares of financial companies and exporters has also contributed to such dynamics. German business sentiment, which was worse than forecasted, acted as an influence as well. Nevertheless, the British statistics on Retail Sales provided substantial support to stock markets. There is no economic news that could have an impact on stock markets scheduled for today. This is why the trading will be exposed to the dynamics of other currency pairs and commodity markets.
Resistance: 10829.62, 10991.65, 11145.48
Support: 10661.44, 10487.10, 10265.59
Quotes of the precious metal showed a negative trend yesterday, falling by about 1%. This was caused by a general strengthening of the US dollar in response to the decision to raise the key interest rate made by the US Federal Reserve. In addition, the Fed said that next year they plan to raise rates four more times. Investors expect to see a less optimistic picture, which, in turn, puts additional pressure on gold. It should be noted that the reaction of the market on the rate hike was muted, since such a step by the Fed was partly already priced in. Therefore, we can assume that in the next year gold prices will again be updating its multi-year lows against the background of monetary tightening by the Fed.
Resistance: 1058,45, 1068,40, 1074,64
Support: 1052,14, 1046,15, 1037,04