Daily Market Review — 20/01/2016

Daily Market Review — 20/01/2016

Report on U.S. Inflation Rate and the Bank of Canada Interest Rate Decisions – Main Events of the Day



USDJPY (00000002)

During yesterday’s trading the pair showed mixed dynamics. Thus, in the first half of the day the US dollar strengthened against the background of the lack of need for protective assets, one of which is the Japanese yen. Such dynamics were caused by the publication of economic statistics in China, which met the expectations of experts. However, the second half of the day changed the dynamics of the pair amid falling oil prices. This was the reason why investors refused to use the yen as a safe asset. This dynamic intensified this morning, as concerns over excess oil on the world market and weak demand from China exert serious pressure on risky assets and, on the other hand, increase the demand for safer investments. Meanwhile, in addition to the external negative, today the report on U.S. Inflation Rate, publication of which is scheduled for 13:30 (GMT), may have a significant impact on pair’s dynamics. The leaders of the US Federal Reserve will bear in mind to the low inflation rate before making their decisions to change the current monetary policy.

Resistance: 117.30, 118.11, 118.83
Support: 116.510, 116.04, 115.55


USDCAD (00000003)

The Canadian dollar has recently come under pressure due to the sharp drop in oil prices, the asset Canadian currency directly depends on. During yesterday’s session, in the morning, there was some stabilization of the oil market, which allowed us to halt the Canadian currency from falling further. Meanwhile, concerns about the oversupply of oil on the world market again prompted investors to get rid of risky assets, such as oil. In addition, investors are concerned about the low demand from the second largest oil consumer in the world – China. The current dynamics of pair will depend on the situation in the oil market, as well as the publication of important economic statistics. For example, at 13:30 (GMT) there will be report on U.S. Inflation Rate, and at 15:00 (GMT) the Bank of Canada will announce its interest rate decision. At this time, there will be a statement from the Canadian regulator.

Resistance: 1.4669, 1.4817, 1.4965
Support: 1.4602, 1.4438, 1.4313


Stock Market

S&P500 Futures

SP500 (00000002)

At the end of yesterday’s trading the major US stock markets showed little change. In the morning, stocks rose significantly, aided by the statistics of China’s GDP, which fully met the expectations of experts. However, the falling of oil prices, which continue to suffer, is exerting some pressure. The quarterly reports of Bank of America, Morgan Stanley and UnitedHealth Group were better than the average forecast of analysts and provided some support to the US stock market. On Monday quarterly reporting season officially started and will continue for the next nine weeks. Today, a report on U.S. Inflation Rate at13:30 (GMT) may have some impact on trading dynamics

Resistance: 1856.07, 1871.09, 1891.89
Support: 1833.22, 1818.48, 1805.76



Light Sweet Crude Oil Futures

CrudeOil (00000004)

Yesterday, quotes of “black gold” showed a positive trend during the first half of the trading day, driven by expectations of additional stimulus measures by the Chinese government to support the national economy. In addition, yesterday an assessment of China’s GDP for the fourth quarter, which is fully in line with analyst estimates was published. Still, concerns over the oversupply of oil on the world market and the lack of demand from China exert a lot of pressure on prices. In addition, the International Energy Agency published pessimistic forecasts for oil demand in 2016. In particular low demand from emerging economies and the increase in supply from Iran, as we know international sanctions against Iran were finally lifted. Today, the publication of U.S. API Weekly Crude Oil Stock at 21:35 (GMT) may impact the market.

Resistance: 29.93, 31.67, 32.55
Support: 28.22, 27.50, 27.00


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