Daily Market Review — 27/01/2016
Fed Interest Rate Decision and FOMC Statement the Main Events Today
There was no significant dynamic during yesterday’s trading day, due to investors’ unwillingness to risk. Recovery in oil prices contributed to a decrease in demand for the Euro, as investors prefer higher-yielding assets. However, statistics from the US impacted the dynamics of the pair yesterday. Thus, the Service PMI presented by the Markit fell to – 53.7 (the forecast was 54). At the same time, the indicator of consumer confidence showed US growth. Meanwhile, the U.S. Richmond Manufacturing Index came in at 2, the experts forecasted 3. Today, market participants should pay attention to the announcement of results of the two-day US Federal Reserve meeting, which began yesterday. The Fed Interest Rate Decision and FOMC Statement will be announced today at 19:00 (GMT). According to the forecasts, the Fed will not change the current settings of monetary policy, but in the FOMC Statement may contain hints of next steps from the US regulator.
Resistance: 1.0904, 1.0941, 1.0975
Support: 1.0835, 1.0803, 1.0769
During yesterday’s trading day the Australian currency recovered losses against the US dollar. Such dynamics were caused by some stabilization in commodity areas, and primarily in the oil market. Despite the positive statistics on the US economy the pair continued to grow. Today the Consumer Price Index (CPI) in Australia was presented. According to published statistics, in the fourth quarter, prices rose by 0.4% against the expected 0.3%. The annualized rate – 1.7%, forecasted level was 1.6%. Accordingly, the Reserve Bank of Australia may review the prospects for monetary policy. The current dynamics of pair will depend entirely on the US Federal Reserve meeting and FOMC Statement at 19:00 (GMT).
Resistance: 0.7049, 0.7097, 0.7169
Support: 0.6994, 0.6955, 0.6916
European stock markets showed a positive trend during yesterday’s trading day, due to rising prices of energy companies’ shares after the oil price recovery. The Bank of England Governor Mark Carney’s speech supported the market. He said there won’t be a rate hike in the near future. Also the US Consumer confidence index which has grown steadily supported the market. Today, investors will pay their attention to the Fed Interest Rate Decision, which will be announced at 19:00 (GMT). If the FOMC Statement incudes information that there is a need to observe the economic statistics for a decision on a further increase in interest rates, it could support the global stock markets. Remember that in the case of rate increases the stock market, as one of the most low-income, will be under pressure.
Resistance: 9937.27, 10116.17, 10279.51
Support: 9740.22, 9527.61, 9260.37
Gold rose in price yesterday against the background of the US dollar weakening, waiting for the results of the meeting the US Federal Reserve. Since the beginning of the year gold has risen in price by 5%. Meanwhile, some support for precious metal quotes provided reduction in the total supply of gold on the world market for the first time in eight years. Also, there is a demand in China because of New Year. According to most analysts, gold prices will gradually recover in 2016, because gold will be used as a protective asset. Such dynamics are caused by doubts about the rapid recovery of the Chinese economy.
Resistance: 1122.99, 1132.17, 1146.45
Support: 1112.73, 1102.52, 1094.94