Daily Market Review — 19/05/2016

Daily Market Review — 19/05/2016

Traders should focus on today’s UK and US economic data

Forex

GBP/USD

GBPUSD

Yesterday, the British currency strengthened significantly against the US dollar primarily because of better than expected UK market labor data. Additionally, a Brexit poll indicated that 55% advocated for the UK to remain in the EU, with only 37% opposing. However, the results were capped with the outcome of last night’s FOMC Meeting Minutes. Fed officials noted that the US economy is recovering nicely. Additionally, majority of Fed officials did not rule out the possibility of a rate hike during June’s upcoming meeting. Today’s trading dynamics will largely depend on the UK retail sales report, scheduled for 8:30 GMT. Furthermore, the Philly Fed Manufacturing Index, scheduled for 12:30 GMT should affect the pair.

Resistance: 1.4632, 1.4695, 1.4769
Support: 1.4523, 1.4477, 1.4404

AUD/USD

AUDUSD

Yesterday, the pair trended negatively as poor economic statistics hurt the Australian economy. Furthermore, the FOMC Meeting Minutes indicated the US economy is recovering nicely. Additionally, a potential June rate hike is in the cards. This morning so far, the AUD/USD fell after Australian employment data showed a gain of 10,800 jobs, compared to 12,500 expected in the month of April. The unemployment rate remained the same at 5.7%, below the expected 5.8% level, while the participation rate fell to 64.8%. Today’s dynamics will depend on the US Philly Fed Manufacturing Index and the weekly unemployment claims scheduled for 12:30 GMT.

Resistance: 0.7250, 0.7348, 0.7446
Support: 0.7184, 0.7111, 0.7040

 

Stock Market

DAX Futures

DAX

Major stock indexes across Europe grew somewhat yesterday, mainly due to the Eurozone’s CPI figures. Signs of deflation within the Eurozone may cause the European Central Bank to further expand its quantitative easing program in order to further stimulate the economy, which should provide further support to the European markets. Today’s trading dynamics will primarily depend on the publication of the ECB’s last meeting, scheduled for 11:30 GMT.

Resistance: 9955.40, 10012.79, 10077.35
Support: 9846.36, 9784.66, 9733.01

 

Commodities

GOLD

Gold

The precious metal fell more than $25 yesterday, mostly due to the FOMC Meeting Minutes. Talks of at least two further rate hikes put a significant amount of pressure on this commodity. It should be noted that higher interest rates usually have a negative impact on gold. Today’s data on the US labor and manufacturing markets, scheduled for 12:30 GMT should influence gold prices.

Resistance: 1258.66, 1266.19, 1272.10
Support: 1248.35, 1243.86, 1238.75

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