Daily Market Review — 23/11/2015
The Fed Announcement Is the Day’s Main Event
The pair has been trading on a negative trend for the second consecutive session. This was caused by the speech of ECB’s President Mario Draghi who, on Friday, called for a possible extension of the quantitative easing program at the meeting in December. Meanwhile, representatives of the US Federal Reserve once again hinted at the readiness of the FOMC to raise rates at the next meeting, scheduled for December 16–17. The discrepancy between the monetary policies of these two central banks will continue to put pressure on the pair. Today’s focus will be on data on the index of business activity in the services sector and the industrial sector in France, Germany and the euro area, scheduled for 08:00 (GMT), 08:30 (GMT) and 09:00 ( GMT), respectively. Particular attention will be focused on the Fed’s announcement, scheduled for 15:00 (GMT). It is a non-regular announcement and thus it may contain important messages relating to Fed’s policy.
Resistance: 1.0673, 1.0763, 1.0806
Support: 1.0600, 1.0522, 1.0468
The pair showed moderate growth on Friday. This was caused by the absence of important economic statistics on the US economy. However, Fed official Dudley said the timing of the rate increase will depend entirely on the incoming economic statistics. He also added that the US economy will be faring better in 2016. The start of this new trading week was marked by a sharp depreciation of the Australian dollar against the US dollar. This was caused by a fall in commodity prices. The price of copper fell to a six-month low. Recall that copper and other commodities are Australia’s most important exports. Therefore, the Australian currency is likely to remain under pressure throughout the day.
Resistance: 0.7214, 0.7268, 0.7308
Support: 0.7150, 0.7084, 0.7015
On Friday, the major US stock markets have traded in green territory, thanks to the growth of the public services and industrial goods sectors. The market was also supported by Nike, which announced it will repurchase some of its shares, as well as increase dividends. Quarterly reporting season is coming to an end, 96% of the companies included in the S&P500 have already reported, while only 44% of companies reported an increase in revenue above the predicted values. Today’s trading will depend heavily on the dynamics of the oil market and other raw materials. Moreover, at 15:00 (GMT) the Fed will release an announcement, which may contain hints of further steps the US regulator is ready to take.
Resistance: 2093.90, 2104.26, 2109.09
Support: 2075.96, 2064.23, 2044.56
Light Sweet Crude Oil Futures
During Friday’s session, oil trading was mixed. The general strengthening of the US currency and an oversupply in the world market put pressure on prices. Meanwhile, anticipation of the Iranian oil entering the global markets immediately after the lifting of sanctions is also putting pressure on oil prices. At the same time, one of the leading US banks said that the risks for yet another further drop in prices for “black gold” is still high. The six-month forecast of the bank is negative and implies an even stronger decline in commodity prices than analysts previously predicted. In today’s trading, oil started with a fall against the background of a general decline in commodity prices. Further dynamics will depend on the general situation on the commodity markets and the US dollar exchange rate.
Resistance: 41.19, 42.07, 43.06
Support: 40.57, 40.00, 39.50