Daily Market Review — 25/01/2016
German IFO Institute’s Data is the Main Event Today
The pair showed a downward trend during Friday’s session, mainly due to the strengthening of the US currency. The publications of statistics on the index of business activity in the manufacturing and service sectors in France, Germany and the Eurozone, coming in lower than average forecast of experts, put some pressure on the Euro. On the other hand, the index of economic activity from the Federal Reserve Bank of Chicago and index of business activity in the US manufacturing sector were better than analysts’ expectations. In addition, sales in the secondary housing market in the US came out at 5.46 million against the average forecast of experts at the level of 5.2 million. Today, the German IFO Institute will publish the data at 09:00 (GMT) and it may influence the market. Also, an important event today – the President of the ECB, Mario Draghi’s, speech is scheduled for 18:00 (GMT).
Resistance: 1.0859, 1.0904, 1.0943
Support: 1.0803, 1.0769, 1.0719
British currency showed some growth during Friday’s trading day, due to the recovery in commodity markets. Despite the publication of weak data on retail sales in the UK, the pair is experiencing an uptrend. Thus, according to data presented on Friday, retail sales in December fell by 1% against expectations of a 0.3% contraction. The annualized basis rate fell by 2.6% against an average forecast of 4.3%. However, the negative UK data led to closure of a pair of shorts, which led to some of its growth. The current dynamics of pair will depend entirely on investors desire to risk, as well as the situation in the commodity markets.
Resistance: 1.4363, 1.4477, 1.4601
Support: 1.4243, 1.4082, 1.3955
European stock markets showed strong growth during Friday’s session as investors widely expect the world’s central banks will resort to stimulation for the expansion of their economies. Also, recovery in commodity markets, which boosted the shares of energy and mining companies, supported the markets. On Thursday, ECB President Mario Draghi said that at the next meeting in March, the European regulator is likely to revise the parameters of the current monetary policy. The data on business activity in the manufacturing and services sectors of the Eurozone, Germany and France, which were slightly below forecasts of experts, also influenced the markets. Today, the trading’s dynamics will depend on the situation on the commodity markets, as well as the publication of data from the German IFO Institute at 09:00 (GMT).
Resistance: 5767.01, 5832.71, 5899.53
Support: 5688.32, 5600.02, 5548.00
Growth of world stock markets led to a decline in demand for protective assets, such as gold. The price of energy stocks increased and reduced demand for defensive assets. Meanwhile, gold is near the psychological level of $1100.00 per ounce. The celebration of the Chinese New Year may increase demand for the metal and it will lead to quotes growth. However, analysts do not predict the excessive growth of quotations in connection with the start of monetary tightening by the US Federal Reserve. Data on the US economy manufacturing index came out slightly better average forecasts of experts which has put some pressure on gold. Today’s trend will depend on the situation in the stock markets since the publication of important economic statistics in the US today is not planned.
Resistance: 1104.47, 1109.30, 1112.74
Support: 1092.12, 1083.37, 1075.19