Daily Market Review — 19/01/2016
Inflation Rates in Great Britain and the Eurozone − Main Events Today
During yesterday’s trading the US dollar strengthened somewhat against the Euro after falling on the background of negative statistics on Friday. Yesterday’s economic calendar was empty, so the pair responded to external background and technical signals. This morning statistics on the economy of the peace breaker – China were published. In general, we can say that the data came in low, as expected, and didn’t have a strong influence on the pair. Investors often use the Euro as a funding currency, which generates an increased demand for it. Nevertheless, the report on the Eurozone’s inflation rate will focus on the publication scheduled for 10:00 (GMT) today. At the same time Germany’s ZEW Survey Expectations and the Eurozone ZEW Survey Expectations will be published. The U.S. Overall Net Capital Flow that will be published at 21:00 (GMT), also may influence the dynamics of the pair
Resistance: 1.0900, 1.0943, 1.0991
Support: 1.0834, 1.0803, 1.0769
During the first half of yesterday’s trading day the British currency recovered from losses earlier this week. However, this dynamic did not last long, and the pair fell again, due, in part to the strengthening of the US currency. Meanwhile, concerns about the UK leaving the European Union and the slowing of the British economy have put significant pressure on the pound sterling. Today, a significant impact on the dynamics of the pair may come from data on inflation in the UK (CPI) that will be published at 09:30 (GMT). It is predicted that in December consumer prices showed zero change. In case of better than expected data, the market may react to the strengthening of the British currency.
Resistance: 1,4353, 1,4477, 1,4552
Support: 1,4235, 1,4181, 1,4106
European stock markets yesterday showed a negative trend. This was due to lingering concerns over a slowdown in the Chinese economy, as well as a further decline in oil prices. Remember that in recent quotes “black gold” almost daily updated multi-year lows, due to expectations of Iranian oil. The country could increase the total supply of oil on the market. However, the focus of investors is on the ECB meeting, which is scheduled for Thursday. According to most experts, there will not be any important changes, but discussion on expanding stimulus measures will take place at the March meeting.
Resistance: 9608,92, 9679,87, 9768,56
Support: 9406,21, 9337,17, 9260,37
Gold did not show any movement during yesterday’s session, as no important economic statistics were published, and US markets were closed for a public holiday. Earlier on Friday, gold rose in price significantly as investors chose it as a safe asset on the back of negative statistics from the US and another drop in the stock markets. Yesterday, trading took place on the back of some stabilization in the stock markets. This morning, investors are closely watching China’s economic statistics on GDP. Thus, according to the presented data, China’s GDP in the fourth quarter showed an increase of 6.8%, which coincided with forecasts of experts. Such a situation may calm down investors and lead to a drop in speculative demand for the precious metal. In general, investors will closely monitor the further dynamics of the US dollar, as well as the stock markets.
Resistance: 1092,12, 1097,44, 1108,16
Support: 1083,37, 1075,02, 1070,53