Daily Market Review — 29/07/2015
Markets Keep Calm and Await FOMC Decision
The main event today will certainly be the US Federal Reserve decision on the interest rates scheduled for 18:00 (GMT). The pair traded negatively yesterday because of the absence of news from Europe and existing expectations on US data. In the second half of the trading day the pair outplayed almost all the losses that were caused by negative statistics from the US. The Consumer Confidence Index unexpectedly fell to 90.8 versus an average forecast of 100.0. It is also worth noting that if the FOMC Statement will contain hints at tightening monetary policy, it will strengthen the faith of market participants that the first increase in the base rate will be held in September this year.
Resistance: 1.1084, 1.1099, 1.1128
Support: 1.1021, 1.0968, 1.0922
During yesterday’s trading day the pair regained the losses suffered on Monday against the background of the fall of the Chinese stock market. Market participants stopped viewing yen as a safe-haven asset before the FOMC meeting. Meanwhile, after the publication of negative statistics from the US, the pair returned to the fall. Today, the Japanese currency supported by positive retail sales data released earlier, which showed that the index for June rose to 0.9% against the average analyst forecast of 0.5%.
Resistance: 123.81, 124.10, 124.48
Support: 123.32, 122.91, 122.39
Yesterday’s trading session European stock markets started on a positive note, winning back the losses suffered last week. Chinese stock indices have risen from lows, thereby pushing up the European stock exchanges. European investors worried about slowing Chinese economy, which is quite significant in global terms. The dynamics of indices are influenced by M&A activity in the region, as well as the positive quarterly reports. Also, investors await Fed decision on US interest rates.
Resistance: 11243.78, 11411.45, 11529.07
Support: 11025.69, 10924.79, 10650.93
Gold continues to be under pressure for the fifth week in a row. Most investors were cautious before the publication of the results from the FOMC meeting. Yesterday, gold traded in a fairly narrow range, indicating that investors are trying to minimize risks before the release. It should also be noted that gold prices have not reacted to the fall of China’s stock market on Monday. Recall that gold is a safe-haven asset in times of financial and economic instability.
Resistance: 1104.96, 1109.80, 1118.74
Support: 1091.61, 1087.08, 1077.23