Daily Market Review — 26/11/2015
Markets Will Be In Correction Mode Today
The main event for the single European Currency in yesterday’s trading was the message that the ECB may extend the asset purchase program, better known as quantitative easing. Against this background, the fate of yesterday’s movement of the single currency was pre-determined. It is worth noting that the Eurozone’s Economic Calendar yesterday was empty. In addition, the fall of the Euro has been pushed by the speech of the ECB Vice-President, who said that he doesn’t exclude the possibility of lowering interest rates on deposits to even lower levels. The British currency, on the contrary, gained support from the UK Treasury Autumn Forecast Statement and the UK Finance Minister Osborne’s speech. The Treasury increased the indicative levels of economic growth in the UK over the next three years. The current dynamics of the pair will be influenced by Gfk Consumer Confidence Survey in Germany, which will be released at 12:00 (GMT). There is no news for the British pound today.
Resistance: 0.7038, 0.7067, 0.7103
Support: 0.7001, 0.6980, 0.6953
Yesterday the pair was trading in the upward movement, caused by the release of positive US statistics. In addition, the escalation of the conflict in the Middle East has not found its continuation in the financial markets. A huge number of US economic statistics were published yesterday, as today is an official holiday in the United States. According to the data, Durable Goods Orders rose more than the average forecast. Meanwhile, data on the US labor market pointed to the positive dynamics of the economy. It is worth emphasizing the number of Initial Jobless Claims has been below the psychological threshold of 300,000 for the 38th week in a row, which is the longest stroke in more than 40 years. And at the same time, Personal Income and Spending Indices, as well as the Personal Consumption Expenditures Index came out green, even though they fell short of analysts’ forecasts. Today’s dynamics of the USD/JPY can be affected by the Consumer Price Index in Japan, which is scheduled for 23:30 (GMT).
Resistance: 122.93, 123.44, 123.76
Support: 122.23, 121.66, 121.38
European Stock Exchanges showed a positive trend yesterday, as investors turned their attention from a conflict in the Middle East to prospects of further stimulus from the ECB, as well as data on the US Economy. The dynamics of trading were influenced by data on the number of mortgage approvals in the UK, as well as the UK Treasury Autumn Forecast Statement. Both reports showed the strength of the British Economy. Meanwhile, the US statistics published yesterday, were somewhat mixed. According to the data, consumer spending decreased slightly in October. And at the same time, Durable Goods Orders showed strong growth after the disastrous fall of the previous month. It has added optimism to the Stock Markets. Today’s dynamics will be influenced by yesterday’s statements of the ECB representatives. There is no important Economic News scheduled for today that could have a significant impact on Trading.
Resistance: 6364.11, 6400.88, 6434.14
Support: 6305.23, 6268.19, 6215.46
Quotes of precious metal showed another collapse in yesterday’s trading, as a series of positive US data returned to the market expectations of imminent monetary tightening by the US Federal Reserve. Meanwhile, the majority of Fed officials indicate that the December meeting is the perfect time for the first rate hike. Precious metal is losing value when it comes to rate increases, because it cannot compete with higher-yielding assets such as Treasury Bonds. In addition, physical metal needs to be stored somewhere. The short-term prospects for Gold are negative, if the expected rate hike does take place. Today is a holiday in the US, so the market, most likely, will be correcting after yesterday’s fall.
Resistance: 1087.86, 1097.76, 1106.15
Support: 1065.11, 1055.00, 1044.76