Daily Market Review — 24/11/2015
Releases of GDP Reports in Germany and the United States Will be in Focus of Today
The pair showed some moderate growth in the first half of yesterday’s trading, driven by better than expected data of Manufacturing and Services PMI’s in France, Germany and the Eurozone. But sentiment changed by the afternoon before the release of the Fed announcement on monetary policy. The European single currency has dropped against all other currencies as a result. The reason for this was the decline of the EUR/USD, the main currency pair. In today’s trading the EUR/JPY began to fall due to the release of positive statistics on the Japanese Manufacturing PMI. It is worth mentioning that markets in Japan were closed for a public holiday yesterday. Today’s dynamics of the pair will be influenced by the final data on Germany’s GDP in the third quarter, scheduled for 07:00 (GMT). Market participants will be also watching the data from the German institute IFO on current economic conditions, scheduled for release at 09:00 (GMT).
Resistance: 130.62, 131.10, 131.56
Support: 130.33, 130.10, 129.59
The pair started yesterday with moderate growth, due to some statements by representatives of the US Federal Reserve about the future prospects of monetary policy. The discrepancy between monetary and credit policies is becoming increasingly clear, and in the short term it will push the USD/JPY pair to new highs. Nevertheless, yesterday’s published statistics on the business activity in the US manufacturing sector has disappointed. According to the data, the index came out at 52.6 versus an average forecast of 53.9. Existing Home Sales also pointed to a slowdown. Today’s focus will be on the second assessment of US GDP data, to be published at 13:30 (GMT). In addition, today the US Consumer Confidence index will be published at 15:00 (GMT). Average forecasts imply some increase in the index. Meanwhile, the interest of traders will be focused on the publication of the minutes from Bank’s of Japan last meeting at 23:50 (GMT).
Resistance: 123.04, 123.76, 124.39
Support: 122.61, 122.23, 121.66
Since the beginning of the new trading week, the major stock exchanges in Europe showed a negative trend, caused by concerns about the strength of the global economy. Data on business activity in the manufacturing and service sectors of the Eurozone had some influence on the dynamics of yesterday’s session, as they were better than forecasted. However, despite these favorable conditions, European companies continue to reduce their prices for goods and services. This, in turn, may force the ECB to go for another round of stimulus measures. This was confirmed last week by the head of the European regulator Mario Draghi. During his speech, he stressed that he does not exclude the possibility of introducing changes to the existing monetary policy, implying the expansion of quantitative easing and lowering interest rates. In the case of such a step, the stock markets will receive significant support.
Resistance: 6333.46, 6364.11, 6400.88
Support: 6286.72, 6251.07, 6215.46
Precious metals were under pressure against the background of a strengthening US currency, as well as the general decline in commodity prices. At the same time gold prices almost fell to their 6-years lows. The growth of the US dollar is putting pressure on commodity markets. It comes amid expectations for an interest rate increase in the US next month. Such a move by the US regulator will lead to further growth of the national currency, which in turn will have a negative impact on the dynamics of precious metals. Despite the fact that such a move is partially priced in, gold is likely to fall further under pressure. Today’s dynamics of trading can be influenced by the publication of the revised estimate of US GDP for the third quarter, scheduled for 13:30 (GMT).
Resistance: 1076.89, 1085.85, 1097.76
Support: 1065.11, 1055.00, 1045.00