Daily Market Review — 24/08/2015
Investors Are Focused On the Fed Members Speeches
During today’s trading session the pair is continuing its upward movement which began last week. The Chinese stock market fell once again today by more than 8%. Market participants shifted the expectations of the first rate hike by the US Federal Reserve from September to December. The reason for this is the slowdown in the world’s second largest economy that pressures the economies of commodity-dependent countries, as well as developing markets. With the reduction in risk appetite the euro is in demand as a currency with low interest rates to buy higher-yielding assets. Today the economic calendar for the euro area is empty. As for the US economy, the market participants should pay attention to the publication of the Chicago Federal National Activity Index at 12:30 (GMT), as well as speech by the US Fed Member Dennis Lockhart, scheduled for 19:55 (GMT).
Resistance: 1.1497, 1.1544, 1.1639
Support: 1.1369. 1.1291, 1.1106
Today’s trading for the pair began with downward movement, as most analysts think that the British currency is overvalued. The pair is also affected by another drop in the stock markets in China. Market participants are closely watching the Chinese economy, to determine how big impact this situation will have on the growth of the global economy. Today the economic calendar is empty in the UK; therefore the pair will react to the external news, as well as to technical signals.
Resistance: 1.5723, 1.5761, 1.5789
Support: 1.5659, 1.5633, 1.5604
Major European stock markets traded in the red for more than nine consecutive sessions. They are pressured by the concerns about the negative effects of the slowdown of the Chinese economy. In the beginning of trading session on Friday, the British index was trying to show growth, but negative stats from China outweighed positive news from the Eurozone. The Chinese issue leads to the weakness of global stock markets on fears that the situation in China will influence other markets. It is also worth noting that the dynamics of the indices also pressured by drop in oil prices.
Resistance: 6334.03, 6399.52, 6467.00
Support: 6158.39, 6129.40, 6101.39
Gold prices are continuing to steadily grow, as investors are not willing to take risks and choose the precious metal as a safe-haven. There was some correction on Friday due to partial profit-taking after nearly a week of growth. Prices continue to be influenced by publication of the Fed meeting minutes, as well as by today’s drop of the Chinese stock market. Investors now expect that the first hike of the US interest rates will be in December. Recall that investors expected before, the Fed raises its rates at its September meeting, but the problems in the Chinese economy will probably shift the timing. This fact also supports gold prices.
Resistance: 1167.88, 1174.30, 1179.18
Support: 1155.16, 1148.72, 1141.79