Weekly Market Review – 22-26/06/2015
Last week’s decision by the Federal Open Market Committee to leave interest rates unchanged corresponded with market expectations, but the FOMC Statement caused strong growth in the US stock market. The statement turned out to be much more “dovish” than expected.
This week players’ attention will be focused on the publication of Durable Goods Orders report on Tuesday at 12:30 GMT, revised GDP data for the first quarter on Wednesday at 12:30 GMT, Initial Jobless Claims on Thursday at 12:30 GMT and the Reuters/Michigan Consumer Sentiment Index on Friday at 14:00 GMT.
It seems a continuation of growth is quite possible in the short term; however, the overall trend is negative. Bearing in mind that the Fed is about to tighten its monetary policy in the near future, the market will turn to a downtrend in the medium term period.
There is no surprise that investor’s attention is focused on the situation around Greece. After the failure of talks between the Eurogroup and Greek government Thursday, President of the European Council Donald Tusk has called for an emergency EU summit in Brussels Monday. Greece has prepared a new proposal to its international creditors, but the situation remains extremely tense. Today’s decision at the summit will play a decisive role in the markets mood.
Any EUR currency pairs will react to the news around the Greek deadlock. On the one hand the failure of the Greek government to negotiate with its creditors put pressure on the single currency, but it is becoming more a popular opinion, that the EUR will grow in the case of a Greek default. As a reminder, Greece has to pay IMF €1.6 billion by June 30.
The key resistance line is located in the area of 1.1500. Just above this level a number of stop-orders are located. The major support line is near the level of 10th candlestick. If the pair breaks through it, it could potentially cause the movement down to parity.
Brent Oil Daily
It appears that the most likely scenario in the oil market is return to downtrend in the medium term perspective on the background of oversupply. The immediate target is at 60.00.